MoD Ship Charters

Lord Burnham: asked Her Majesty's Government:
	Whether ships chartered by the Ministry of Defence to transport British military forces to the Gulf will be re-flagged to the Red Ensign; and whether they will be required to operate with, as a minimum, a British master.

Lord Bach: My Lords, UK Armed Forces personnel are being transported to the Gulf either by air or on Royal Navy ships. Any decision to re-flag ships chartered to transport cargo to the Gulf is given careful consideration. Factors informing any decision include the planned use of the ship; the requirement to carry military escorts and the current nationality of the flag state. Four of the ships chartered for the current operation have been re-flagged to the Red Ensign. The nationality of crews is a matter for the ships' owners.

Lord Burnham: My Lords, I thank the Minister for that Answer, which to some degree is satisfactory. Would it be possible to re-flag these ships to the Blue Ensign as fleet auxiliaries? As regards ships other than the four to which he referred, are the contracts tight enough to prevent their national owners insisting that they take part in an operation not in accordance with the wishes of Her Majesty's Government?
	Finally, will the Minister reply to the second half of my Question?

Lord Bach: My Lords, the contracts with the owners of the ships are sufficiently tight. The difficulty is that there has not been time to re-flag the ships under the Red Ensign. Where we have done so, it has been crucial; where we have not, it has not been crucial.
	I hoped that I had answered the second part of the noble Lord's Question when I said that the nationality of crews is a matter for the ships' owners. In other words, they are not required to have at minimum a British master.

Lord Redesdale: My Lords, is the Minister satisfied that the security of these ships is being taken seriously, considering that they will have to travel through the Suez Canal and past Yemen and that ships have previously been attacked off the coast of Yemen?

Lord Bach: My Lords, the noble Lord, Lord Redesdale, will not expect me to go into details. However, I can tell him that a number of important security measures are in place to protect chartered vessels, their crews and the cargo, including but not limited to, first, the careful routing of the ships, to which his question has relevance; naval shipping providing protection where deemed necessary; and embarkation of military protection parties. On all those ships, there are always on board UK military escorts.

Lord Berkeley: My Lords, am I correct in my understanding of my noble friend's Answer; that it would theoretically be possible for these ships to be crewed and mastered by Iraqis? Surely that would not be sensible.

Lord Bach: My Lords, it is theoretically possible but I do not believe likely.

Lord Campbell of Alloway: My Lords, does not the Red Ensign designation confer the entitlement to have armaments on deck and to man them, as was the case in 1939?

Lord Bach: My Lords, I must confess that I do not know the answer to the noble Lord's question relating to 1939, but I promise that I will find out and write to him. I understand that the equipment on the deck of these ships is not on display.

Lord Skelmersdale: My Lords, the noble Lord used the word "crucial". Under what circumstances would it not be crucial for these ships not to carry the Red Ensign?

Lord Bach: My Lords, there were a number of negatives in that excellent question. Perhaps it is best if I tell the noble Lord that the ships which have been re-flagged have been part of the amphibious task group sailing with ships of the Royal Navy and the Royal Fleet Auxiliary and staying on station. This is front-line shipping and that is the reason why those particular ships have been re-flagged.

Lord Greenway: My Lords, will any of the 40 or so ships which have been chartered on a commercial basis be affected by the recent decision of the Turkish parliament under which they may have to have their charters extended in order to move equipment from Turkey to the Arabian Gulf?

Lord Bach: My Lords, there are 58 chartered ships, of which a number are UK-chartered. I understand that the decision, or non-decision, of the Turkish parliament will have no effect.

Lord Vivian: My Lords, expanding on the security issues, does vetting of the crews of ships flying foreign national flags and the Red Ensign take place when they are carrying British military equipment to the Gulf? What security measures are taken to protect those ships from terrorists posing as crew members?

Lord Bach: My Lords, I must be cautious in how I answer that question. It is not possible to carry out security checks on the crews of commercial vessels chartered by the Ministry of Defence due to a number of circumstances. They include, primarily, the short-notice nature of the Ministry of Defence charter requirements; the rapid turnover of crew members; and non-residency in the United Kingdom. Of course it would be desirable to do so, but in the real world it just is not practicable.
	As regards security measures, I repeat what I said to the noble Lord, Lord Redesdale. Security measures are in place, some of which I referred to in my answer to the noble Lord and others I would rather not go into.

Lord Peston: My Lords, will my noble friend enlighten me on one matter? I thought that a large part of the world's merchant fleet was not flagged to the Red Ensign as a tax dodge. Are my noble friend and Her Majesty's Government totally happy that our troops will be carried into a theatre of war by companies trying to avoid taxation in this country?

Lord Bach: My Lords, as a Defence Minister I am not normally asked questions about tax dodges. I am as confident as I possibly can be so far as concerns the noble Lord's question.

Lord Elton: My Lords, the reciprocal part of the last question is: is the Minister satisfied with the way in which the British flagged fleet has diminished over the past 15 years, and are the Government going to do something to reverse the position?

Lord Bach: My Lords, that is a very wide question. But I am delighted to say—as I am answering for the Government, as he would remind me if I failed to answer—that there has been a steady increase in United Kingdom registered shipping: around 50 per cent over the past two years. That figure contrasts well with that for the preceding period.

Markets

Lord Sheldon: asked Her Majesty's Government:
	In view of the speech by the Chancellor of the Exchequer to the Social Market Foundation on 3rd February, what are those areas where they consider markets cannot deliver the long-term returns required.

Lord McIntosh of Haringey: My Lords, the Government's central objective is to create a more prosperous Britain, with opportunity and security for all. In many areas, private firms operating in well-functioning markets can help to achieve this objective, by efficiently providing high-quality goods and services to consumers. But for certain key public services, such as healthcare, schools and national defence, a range of market failures can make public provision a more efficient and equitable means of delivery.

Lord Sheldon: My Lords, I thank my noble friend for that reply. The speech was a remarkable personal comment on those areas of public policy where markets are not appropriate and where public action is required. I know that my noble friend will have read this most important speech. Will he comment on the implications of the speech in the light of the current debate on the future of the National Health Service?

Lord McIntosh of Haringey: My Lords, I agree about the importance of the speech. I rather think that it will be referred to in economics textbooks and in studies of public policy for many years to come. As to the National Health Service, the Chancellor spent a considerable part of the speech describing the particular characteristics of the National Health Service which make public provision necessary: for example, the difficulty of specifying contracts, the fact that there are local monopolies in various specialisms in health, and in particular that there is very poor—too poor—consumer information. But at the same time, it is government policy to devolve responsibility for healthcare matters to the front-line organisations.

Lord Saatchi: My Lords, is not one of the most attractive aspects of the party opposite its belief in universal provision free at the point of use? Is it not a sad end of that romantic dream that now the Government intend to charge people for public services as well as taxing them? Does the Minister appreciate the scale of public disquiet about what that means—as in these findings: 37 per cent of people think that most people will end up paying for private schools; 56 per cent think the same about private healthcare; 59 per cent say that about private welfare insurance; and 66 per cent say that most people will end up paying for private pensions?

Lord McIntosh of Haringey: My Lords, I am sorry that the noble Lord thinks it more important to report to the House on opinion research findings than to read the speech. Had he read the speech, he would have realised that the principle of public service provision free at the point of delivery is exactly the thrust of the Chancellor's argument about healthcare. I referred also to schools and to national defence. I should have to know the provenance of the noble Lord's figures relating to public opinion in order to comment on them. As a market researcher, I am sorry to say that far too many dubious polls have been published in the past few years and months.

Lord Barnett: My Lords, I am sure that the researcher for the noble Lord, Lord Saatchi, will have read the speech—as will my noble friend; I know how assiduous he is. Perhaps I may draw my noble friend's attention to a particular point in the speech. My right honourable friend the Chancellor said:
	"in those areas where markets failures are chronic, I am suggesting that we step up our efforts to pioneer more decentralised systems of public service delivery".
	Can my noble friend tell the House what exactly he had in mind?

Lord McIntosh of Haringey: My Lords, I have already volunteered an answer to that question in referring to the National Health Service and to the Chancellor's statement that in the NHS we would be devolving responsibility to front-line health organisations. The Secretary of State for Health is very keen on that. If that is allied to what the Department of Health has been doing in improving and establishing inspection facilities, it will be seen that the organisation of the National Health Service is very much in line with what the Chancellor is describing.

Lord Lamont of Lerwick: My Lords, what philosophical distinction does the Minister draw between, on the one hand, charging for prescriptions and charging for road use in London, and not charging for other public services?

Lord McIntosh of Haringey: My Lords, prescription charging goes back a very long way and has not been challenged by governments of either political persuasion for more than 50 years. That is an accepted variation on the principle of free delivery at point of use. As for congestion charging, because of the growth of traffic, it is no longer acceptable to say that all roads shall be available to all types of traffic at all times without some sort of charge. The introduction of the congestion charge in London is a good example of how that is both necessary and correctable.

Lord Newby: My Lords, in the speech, the Chancellor says that achieving the Government's economic objectives,
	"demands the courage to push forward with all the radical long term reforms necessary to enhance productivity".
	Given the Government's extremely patchy record on productivity, what courageous measures did the Chancellor have in mind?

Lord McIntosh of Haringey: My Lords, I do not accept that the record is patchy unless the noble Lord, Lord Newby, means by patchy that he cannot claim that it is a bad record. I suspect that that is the case, because, as he very well knows, there have been significant improvements in productivity during the lifetime of the Government.

Lord Naseby: My Lords, although the Minister derides the view of my noble friend Lord Saatchi on opinion polls, is not the Chancellor's speech an opinion in itself? Does the Minister recognise that there really has not been any progress on the health service in the last seven years? Waiting lists are as long as they have ever been—probably longer. If there is to be devolved power to the front line—to the GPs, in other words—does that mean we can hope to have fundholding back again?

Lord McIntosh of Haringey: My Lords, I do not know what the noble Lord heard of what I said about opinion polls. As a survey researcher myself, I am not one to criticise opinion polls as such. However, I am one to criticise bad opinion polls, and I would need to know more about the sources of the noble Lord, Lord Saatchi, to comment on them. As for the point about delivery in the health service, the noble Lord, Lord Naseby, is plain wrong. Since 1997, we have 10,000 more doctors, 30,000 more nurses and 750,000 elective admissions—that is, 16 per cent—and waiting lists are down by 116,000.

European Working Time Directive

Lord Bradshaw: asked Her Majesty's Government:
	Why they intend to implement the European Working Time Directive on the railways before they implement it on the roads.

Lord Sainsbury of Turville: My Lords, the Government are required to implement the Horizontal Amending Directive which extends the Working Time Directive to all railway workers or non-mobile workers and some road transport workers by 1st August 2003. However, drivers subject to EU drivers' hours rules are subject to a more specific working time directive called the Road Transport Directive, which was adopted only in March 2002 and is required to be implemented by March 2005.

Lord Bradshaw: My Lords, I thank the Minister for that reply. Is he aware that between now and the time of implementation, it will be quite impossible to recruit, for example, sufficient train drivers and signal engineers to make up for the extra employees who will be required to implement the directive? Is it necessary to implement the directive so soon? Why does the road transport industry have a derogation until 2006 or 2009, depending on the size of vehicle? Will the directive be implemented by other European countries or will we, once again, be zealots for introduction while other people please themselves?

Lord Sainsbury of Turville: My Lords, I hope I made it clear in my Answer that we have no option about this. It is a piece of a directive that we have to implement by 1st August 2003. It is as simple as that.
	In 1998, the railway sector signed the railway social partner agreement, which was incorporated in the Horizontal Amending Directive in 2000. So the railway sector has had five years in which to implement this regulation. The idea that it has suddenly been sprung on the sector is misleading. Five years is a perfectly reasonable amount of time, and the sector has had three years since it knew the final date. There were no objections to the railway sector's inclusion in the Horizontal Amending Directive, along with its timetable for implementation, during the course of negotiations which came to a conclusion on 1st August 2000.
	As with most legislation coming out of Brussels, there has been plenty of time to take notice of it, deal with the situation and even recruit people. There is no derogation on the Road Transport Directive, which was adopted only in March 2002 and is required to be implemented by March 2005.

Lord Berkeley: My Lords, my noble friend will be aware that the regulations from his department to implement the directive into national law were published only this winter. I declare an interest as chairman of the Rail Freight Group, but this applies to all rail passengers or freight. Until those details were published, it was not possible to get into the nitty-gritty of how many new drivers and signalmen were required. So in fact the Minister is allowing only six months for training people, which, as the noble Lord, Lord Bradshaw, said, would take several years. Has the Minister told his colleagues in the Department for Transport? How many trains will have to be cancelled because of the shortage of drivers from 1st August?

Lord Sainsbury of Turville: My Lords, if I may say so, the noble Lord is being somewhat naive. The industry had notice of the legislation, which is quite clear. All that was required was the detailed regulations to implement it. I cannot see that it is that difficult, over this period of time, to take action to deal with the situation. Very precise derogations apply in terms of certain categories such as night work limits, which are there to help the industry.

Baroness Miller of Hendon: My Lords, leaving aside the railways, could one of the reasons that the Government are not implementing the directive on the roads at this time be that it is part of the wider agenda of waiting for the second regulation on road transport, which is currently before Ministers at the Council of Europe? That would impose heavy penalties on the road haulage industry. Why did the Government oppose that regulation at the beginning but have now changed their mind?

Lord Sainsbury of Turville: My Lords, the Road Transport Directive was adopted in March 2002 and is required to be implemented in March 2005. We will implement it by that date. I cannot believe that the noble Baroness is suggesting that we should bring it forward so that we are, as she would say, gold-plating this and putting our industry at a disadvantage compared with the industry in the rest of Europe.

Lord Lea of Crondall: My Lords, although I agree with my noble friend that it is hardly zealotry to want to implement these measures for road and rail—after all, it is 13 years since the original Working Time Directive—it was nevertheless always intended that road and rail directives should, for obvious level playing field reasons, be implemented simultaneously. Is my noble friend aware that this two-year gap—or discrimination as the rail industry will argue—opens up the possibility of legal intervention by the Commission, which would have every chance of success?

Lord Sainsbury of Turville: My Lords, I am not certain that that was ever intended. There are three situations here—the Working Time Directive, the Horizontal Amending Directive and the final three bits of directives which apply to the specific areas of aviation, seafaring and road transport. It is not true that the Road Transport Directive is the only bit of legislation controlling drivers' hours. The tachograph rules limit driving hours for these drivers to a total of 90 hours per fortnight. So regulations already cover road transport to some extent. There is also a question about how Schedule 14 would apply to the situation, with some dispute as to the legal meaning.

Climate Change Levy

Lord Campbell of Croy: asked Her Majesty's Government:
	For how long they intend to retain the climate change levy.

Lord McIntosh of Haringey: My Lords, the climate change levy was introduced in April 2001 as an important part of the Government's climate change programme. The levy package is expected to deliver emissions savings of at least 5 million tonnes of carbon a year by 2010. The Government therefore have no plans to end the levy. Decisions about its rate and scope are, of course, subject to review on a Budget by Budget basis.

Lord Campbell of Croy: My Lords, I thank the noble Lord for his reply. As the levy was not introduced as a permanent fiscal feature and has now been operating as a tax for nearly a year, are there any plans for the period after that prescribed by the Kyoto Protocol, which was the original cause of the measure?

Lord McIntosh of Haringey: My Lords, the Kyoto Protocol has been updated and there are now much longer-term targets for tackling climate change. The energy White Paper published last week talks about dealing with climate change over 50 years. Our policies have to be adapted to deal with those problems.

Lord Ezra: My Lords, in view of the emphasis that last week's energy White Paper places on improving energy efficiency—with which I am sure that the House fully agrees—will the Government ensure that all the proceeds of the climate change levy are devoted to that purpose?

Lord McIntosh of Haringey: My Lords, of course the noble Lord, Lord Ezra, is right that a considerable part of the White Paper is concerned with energy efficiency. We look forward to the resolution of the outstanding issues with emissions trading. We are talking about energy efficiency not just in buildings, but also, through European regulation, in fridges, personal computers and so on. We are looking forward to lower carbon fuels in transport.
	There are no proceeds for the Government from the climate change levy. It is revenue-neutral as far as business is concerned.

Lord Dixon-Smith: My Lords, will the Minister kindly tell the House how much carbon dioxide is not being emitted into the atmosphere, let us say up until the end of the last year for which records were kept? He gave us the estimated figure at the start of the scheme, but he has not given us the actual figure.

Lord McIntosh of Haringey: My Lords, emissions in 1997 were 155 million tonnes of carbon. Taking that as a baseline, by 2020, under the business as usual position there would be 135 million tonnes of carbon. Adding in the target of reducing that by 15 million to 25 million tonnes by 2020 leaves a figure of 110 million to 120 million tonnes, which is equivalent to between 11 and 19 per cent.

Lord Jenkin of Roding: My Lords, have not carbon emissions from power generation been increasing over the past two years?

Lord McIntosh of Haringey: My Lords, I have no reason to doubt the noble Lord's figures.

Lord Dixon-Smith: My Lords, with respect, the noble Lord did not answer my question. I asked what the actual reduction had been until the present time.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Ezra, tells me that it is quite a lot. I am sure that that is right, but I shall have to write to the noble Lord, Lord Dixon-Smith, on that point.

Lord Ezra: My Lords, the purpose of my question was to ask whether the total proceeds of the climate change levy should be devoted to improving energy efficiency. The Minister said that the levy was tax-neutral. That is not the point. I feel it is wrong for it to be used for other purposes. We should be concentrating the whole of the proceeds on energy efficiency.

Lord McIntosh of Haringey: My Lords, there are no proceeds for the Government. We are talking about approximately £900 million a year. That money is revenue forgone, because we have a decrease in employers' national insurance contributions of 0.3 per cent. No money is available to the Government to spend on energy efficiency. The energy White Paper makes it clear that we are providing substantial increases in capital grants and research and development expenditure specifically for renewables. The noble Lord, Lord Ezra, is well aware that we are also encouraging energy efficiency in the ways that I have described.

Electricity (Miscellaneous Provisions) Bill

Lord Sainsbury of Turville: My Lords, I beg to move that this Bill be now read a second time.
	The Bill marks a practical response from the Government to a difficult situation with which we have been confronted. The legislation has been brought forward specifically to deal with the problems faced by British Energy, the country's only private sector nuclear electricity generator.
	Noble Lords will recall that my noble friend Lord McIntosh made a Statement to the House on 28th November about the company. The House will therefore already be aware of the background to the current situation. At the end of the summer last year, British Energy found itself in serious financial difficulty and was on the point of running out of cash entirely. That could have triggered a sudden and unplanned insolvency that would, in the view of the Government and the regulatory authorities, have posed a considerable risk to nuclear safety and the security of electricity supply. Support was therefore needed to ensure that stations could continue to operate safely and generate electricity.
	With nuclear safety and security of supply in mind, the Government decided to extend a loan facility to the company, thereby allowing the breathing space to investigate the possibilities of a restructuring package. The Government's key priorities have been and continue to be nuclear safety and security of supply. However, as we go forward it is also important to consider how existing nuclear liabilities can be dealt with safely, effectively and at least cost to the taxpayer.
	The Bill allows the Government to play their part in ensuring that, going forward, these objectives continue to be met, whether or not the restructuring succeeds. Nuclear power stations will continue to run, nuclear liabilities will be dealt with safely and effectively and customers' lights will stay on.
	The Government have responded in a responsible way to the specific issues faced by British Energy. Our actions have been a sensible and practical response to these events. The same is true of the Bill.
	I am aware that many noble Lords have a keen interest in the wider debate on future energy policy. Last week we published the energy White Paper. Noble Lords will have an opportunity to debate some of the issues raised in the White Paper in greater detail in the future.
	I know that in particular many noble Lords will have strong views, one way or the other, on what role nuclear power should take in the longer-term energy mix. However, the Government's response to the problems at British Energy is quite separate from the question of new nuclear build.
	The Government's actions in relation to British Energy are about dealing with the problems of a particular company, not about the future role of nuclear power. British Energy's nuclear power stations already exist. The nuclear liabilities associated with those stations already exist. I hope that all noble Lords will be able to agree on the importance of dealing safely and effectively with these stations and their liabilities, whatever their views on the desirability of new nuclear build.
	The Bill contains the flexibility to allow the Government to meet their objectives whether the company succeeds in restructuring or, alternatively, fails and is put into administration.
	The Government have agreed to support the restructuring package put forward by the company. This package, which is aimed at bringing the company back to financial viability within the private sector, contains a number of elements, all of which will need to be satisfied if the restructuring is to succeed.
	The company had a number of weaknesses. It suffered a shortfall in cash, heavy indebtedness, excessive exposure to wholesale electricity prices, onerous contracts and significant historic liabilities. It is attempting to address those weaknesses through its restructuring plan.
	In common with standard commercial practice for a company in difficulty, this plan involves a mixture of asset sales and a reduction in both debt and costs more generally. The company is in the process of selling its North American assets. The sale of its stake in Bruce Power, in Canada, was completed on 14th February, and the sale of its stake in Amergen is currently proceeding. The company is negotiating improved terms with its financial stakeholders—banks, bondholders and other major creditors. BNFL has indicated agreement in principle to new contracts at reduced prices. In this way, the company has sought to address and mitigate areas of weakness in its operation.
	The restructuring package also contained a reorganisation of the way in which the company would handle its nuclear liabilities—including dealing with spent fuel and station decommissioning—going forward. The company already makes annual payments to the Nuclear Decommissioning Fund. Once the restructuring deal is implemented, it will also begin to contribute to a new ring-fenced Nuclear Liabilities Fund. The company will begin by issuing £275 million of new bonds for the fund, and from then on every year the company will contribute 65 per cent of available cash to the fund. That ensures that the more successful the company, the more it will contribute to the cost of discharging its nuclear liabilities.
	As noble Lords will be aware, the Government have recognised that if the restructuring is to work, it will need to contribute significantly to the company's historic nuclear fuel liabilities, currently managed by BNFL. The Government have also agreed to stand as guarantor behind future liabilities incurred by the company.
	The Government are prepared to provide financial support for nuclear liabilities in this way because they recognise that, if the company failed, the Government would ultimately have to take responsibility for nuclear liabilities anyway given their responsibilities for nuclear safety and the environment. The restructuring deal represents a route by which British Energy's nuclear stations can contribute to these liabilities while avoiding the additional costs associated with administration.
	In order for the Government fully to play their part in this deal, they will need to be able to pay for the existing contracts for dealing with spent fuel, while at the same time standing guarantee for the costs of discharging the company's liabilities in the future. The current ceiling on expenditure that can be incurred on nuclear liabilities under Schedule 12 of the Electricity Act 1989 prevents us being able to do that. The existing limit of £1 billion, extendable to £2.5 billion, does not give us the flexibility we need to be able to meet our side of the bargain. Therefore, Clause 3 of the Bill repeals that ceiling.
	The Government have agreed to stand guarantee to the rest of BE's nuclear liabilities in the event that the company, through its new Nuclear Liabilities Fund mechanism, cannot meet the costs. Although these liabilities are unavoidable and known, the final cost of dealing with them is subject to considerable uncertainty. The Government have recognised that they must accept ultimate financial responsibility for these liabilities. It would not be consistent with that to apply a fixed financial ceiling to these costs. Noble Lords will therefore understand that the removal of the existing limit is an honest recognition of the fact that, ultimately, it is the Government who must take responsibility for ensuring that nuclear liabilities are dealt with safely and effectively.
	The Bill also contains a provision to disregard any undertaking to make a grant under Schedule 12 for tax purposes. Without that provision, the Government's signing of a commitment to provide support for nuclear liabilities could in itself lead to a massive one-off tax bill for the company. Clearly, it would be illogical for the Government to give a financial commitment that would cause such an enormous fiscal liability for the company—one that might tip it into insolvency. Therefore, Clause 4 is a sensible provision to allow that financial support to be disregarded for tax purposes.
	The provisions included in Clauses 3 and 4 allow the Government effectively to meet their responsibilities for nuclear liabilities if a restructuring goes ahead. However, the Government must also be fully prepared to ensure the continued safe operation of the nuclear power stations if the restructuring deal fails and British Energy is put into administration.
	It is essential that the Government are prepared for the possibility of the company failing and going into administration. It is clearly important for British Energy's nuclear stations to be in safe and responsible hands. So, if the company goes into administration, the Government intend to stand ready to acquire the stations—either directly acquiring the assets, or acquiring the operating companies. Of course, that would not be necessary if an appropriate private sector purchaser came along to acquire the nuclear business from the administrator. However, the Government believe that that is most unlikely to happen because of the specific nature of the business—for example, the significant nuclear liabilities associated with the stations—and the difficulty of predicting the financial consequences of operational risk. As we do not believe a private sector purchaser is likely, the Government want to be ready to act as purchaser of last resort.
	However, the Government are currently prevented buying shares in privatised electricity companies under Section 74 of the Electricity Act 1989. This provision was originally put in place to give confidence that the privatisation process would be seen through and not quickly reversed. However, it has no real relevance in today's electricity industry, over a decade after the initial restructuring and privatisation. Its existence, however, would prevent the Government being able to buy the BE operating companies in administration. Clause 2 therefore seeks to repeal that provision. I should like to make it clear to noble Lords that there is no hidden agenda to renationalise the company. We would have no objection to a private sector buyer purchasing the companies—but, as I have explained, we simply do not expect one to come forward. We therefore need to be ready to act as purchaser of last resort.
	Clause 1 gives the Government explicit parliamentary authority to provide financial assistance to a BE company. The rescue aid which has been extended to British Energy is currently authorised under the Appropriation Act. However, under the concordat with the Public Accounts Committee which has been in place since 1932, it is usual that any significant or long-term expenditure should have additional specific statutory authority. Clause 1 provides that authority. Clause 1 also gives the Government explicit authority to incur expenditure on acquiring BE operating companies or assets. This authority would extend to cover any acquisition which took place in the event of administration.
	It is perhaps worth clarifying for noble Lords that the expenditure authorised under Clause 1 will not, as a matter of policy, be used to deal with support for long-term nuclear liabilities. I have already referred to Schedule 12 to the Electricity Act, which contains a specific power to incur expenditure on nuclear liabilities. It is standard government policy to use specific spending powers where they exist rather than general ones. Therefore, expenditure on BE's nuclear liabilities will be made under Schedule 12 to the Electricity Act rather than Clause 1 of this Bill.
	Finally, I should like to touch on recent developments since the restructuring deal was first announced to the House on 28th November. As announced on 14th February, the company's creditors have agreed to a binding standstill, and agreed in principle to a significant write-down in the value of what they are owed. The company has agreed and now completed the sale of its interest in Bruce Power, and has also made progress on the implementation of its new trading strategy. These developments mark a significant step forward for the company in implementing its restructuring deal.
	However, that is by no means the end of the story. Much still needs to be done if the restructuring deal is to succeed. If it does not, the Government will need to be able to deal with the consequences of administration. So the Government cannot afford to be complacent. We need to continue to be ready for either eventuality—restructuring or administration—and the same applies to the Bill.
	I hope that I have helped noble Lords to understand the broader framework and background to this legislation. I also hope that noble Lords will understand that what we are seeking to achieve with this Bill is the necessary flexibility so that the Government are able to operate effectively in the event of any of the possible outcomes of the current BE situation. This is a small and practical Bill which will allow the Government to meet their core commitments of guaranteeing nuclear safety, ensuring security of supply and dealing safely and effectively with nuclear liabilities in a variety of scenarios. I commend it to the House.
	Moved, That the Bill be now read a second time.—(Lord Sainsbury of Turville.)

Baroness Miller of Hendon: My Lords, what a pretty pass the proudly named British Energy—the flagship of the United Kingdom electricity industry—has come to. The blame lies fairly and squarely, in more or less equal measure, on all the parties involved. It lies on British Energy itself, for a certain amount of mismanagement. It also lies on BNFL, the Government's own key company, which, in the words of my honourable friend the Member for Reigate, failed to drag British Energy "off the rocks" where it had previously deposited it. The blame also lies on the operation of NETA—the new electricity trading arrangement—which has resulted in the target reduction in wholesale electricity prices of 10 per cent being overshot and a lowering of prices by a massive 40 per cent.
	Last, but not least, in this catalogue of those responsible for the present predicament of British Energy must be Her Majesty's Government. They confiscated £2.1 billion of the electricity industry's operating funds in the so-called "windfall tax". Then, in 2000, they imposed a business rates regime which unfairly discriminated against nuclear power stations. Finally, they introduced the so-called climate change levy on the nuclear industry, which does not produce greenhouse gases or climate change problems or other environmental problems and generates its electricity from carbon-free sources, but nevertheless has to pay the levy as if it does. But, unlike other electricity producers, it also has to bear the cost of ultimate decommissioning. That is truly a double whammy. What we now have is the Government coming back and sanctimoniously pretending that they are riding to the rescue with public funds of a company they, and their own BNFL, played a major part in putting into trouble in the first place.
	I accept that further recrimination is pointless, and I shall move on to the Government's solution as embodied in the Bill. For, with the situation that faces us, in the words of the late King Edward VIII when he was still Prince of Wales, "something must be done". The question is not only whether this Bill is the right way of resolving the problem but whether, in the light of the events since the Bill was introduced in another place, the Government should not go back to square one and start all over again. When the Bill was introduced, there was no certainty that a restructuring plan could be produced acceptable to shareholders and creditors alike.
	Reports in the press and a written government statement dated 24th February indicate that a viable restructuring plan has been accepted—the Minister told us that too—resulting in shareholders, institutions and employees losing a lot of money and with banks and substantial creditors accepting pie in the sky in the form of £275 million of equity and deferred bonds in lieu of payment of £1.3 billion debts due to them. I calculate that to be under 5p in the pound—but my arithmetic is not so good, so it is up to the Minister to correct me if I am wrong on that—not in cash but in shares and bonds which may or may not be worth something in the future, if the company can get out of its present mess.
	On 14th February, the company announced that it was considering what was to happen to the existing shareholders and bondholders. Perhaps when the Minister replies he will tell us what conclusion has been reached on that. The company has to find some optimistic investors willing to put up a further £275 million to fund decommissioning costs. The optimism is needed after seeing what has happened to the first lot of investors. As part of the restructuring plan, British Energy is selling its Canadian assets valued at £600 million at the knock-down price of £270 million, as the Minister told us.
	According to my honourable friend Mr Blunt, the Secretary of State told another place in her Statement that,
	"whatever happens, nuclear power stations will continue to generate electricity and will continue to employ staff".—[Official Report, Commons, 27/1/03; col. 595.]
	Well, of course they would.
	British Energy is the only private sector nuclear generator and the country's largest single electricity generator and supplies about 22 per cent of our electricity requirements. The Minister in another place, Mr Wilson, said:
	"It is essential, first, to guarantee nuclear safety and, secondly, to maintain the security of electricity supplies".—[Official Report, Commons, 27/1/03; col. 583.]
	At Second Reading in another place, my honourable friend Mr Blunt made it clear that,
	"There never has been any danger to security of supply".—[Official Report, Commons, 27/1/03; col. 595.].
	Furthermore, my honourable friend in the same debate, at col. 592 of Commons Hansard, specifically referred to,
	"those of us who believe that nuclear power, with its costs and benefits understood, deserves its chance to compete fairly for Britain's future electricity generating capacity".
	Despite the fact that an acceptable restructuring scheme has been achieved, the Government are still pressing ahead with the Bill in its present form allowing for the two alternatives of there being a scheme or there being no scheme. I ask, in all seriousness, why not have a fresh, tidy Bill, devoid of hypothetical circumstances and extraneous matter now that the emergency which prompted the Government's hastily drafted legislation has more or less passed. Why are we not considering a new Bill covering the situation as it now exists, rather than what it might have been without the restructuring scheme?
	The answer lies in the Government's hidden agenda. The problems that have overtaken British Energy—problems which the Government helped to cause, as I explained previously—give the Government the opportunity to slip that hidden agenda onto the statute book. Their plan is the back-door renationalisation of the electricity industry.
	The Electricity Act 1989 prevented the Government from acquiring shares in certain electricity companies. The Minister, Mr Wilson, admitted to another place:
	"It is true that repealing that provision could, in theory, permit the Government to acquire shares in certain other electricity companies where we cannot currently do so, but I stress that we have no intention of doing so".—[Official Report, Commons, 27/1/03; col. 589.]
	Well, of course, I naturally accept the Minister's word that at 4.50 in the afternoon of 27th January 2003 the Government had no such intention, but with a Government that make more U-turns than a London taxi, I have to ask why in that case the provision should be in the Bill.
	In his speech to another place at Second Reading, the Minister constantly referred to British Energy, but the detail of the Bill shows that wider, limitless powers of acquisition are sought. Why? The Bill could be strictly confined to dealing with and solving the British Energy problem because of the clear ruling of Mr Speaker that, since the Bill is simply an enabling measure, it is not hybrid, with all the procedural problems that that would entail. That being so, I cannot see any reason why the Bill should not be confined to British Energy and its problems.
	I shall seek further advice from the Bill Office on that particular point in view of the Speaker's ruling, but in any case I should like to give the Minister advance notice that it will be my intention at a later stage to ensure that the Bill is limited to its intended purposes and not used as a vehicle to renationalise the industry at the command of the Government's trade union paymasters. Perhaps the Government think that we did not notice the unanimous resolution at the TUC conference at Blackpool, calling for British Energy to be renationalised and the demand by John Edmonds, the leader of the GMB union, for what he called a "Railtrack style solution". That is the thin edge of the wedge, if ever I saw one.
	Another problem created by the Bill is the fact that the Government are seeking a blank cheque for the amount they may spend on assisting British Energy and, indeed, the rest of the nuclear power industry. At present, Schedule 12 to the 1989 Act imposes a limit on payments for nuclear liabilities of not more than,
	"£1,000 million or such greater sum, not exceeding £2,500 million, as the Secretary of State may by order specify".
	How much more than £2.5 billion does the Government think they might want, or need, to spend?
	On 5th September, the Secretary of State for Trade and Industry told BBC News that,
	"there is no question at all of taxpayers writing a blank cheque to British Energy and its shareholders".
	Well, what is removing the spending limits imposed by the 1989 Act but a blank cheque and an invitation to a spendthrift Government to help themselves, unhindered, to taxpayers' money with no control by Parliament? I happen to believe that a limit of between £1 and £2.5 billion, which was the discretion that the former Conservative government wisely imposed, is more than enough money for the present Government to spend without coming back to Parliament to make out a case for wanting more.
	I reject the Minister's lame explanation to another place, at col. 587 of Commons Hansard, that the Government needed what he called,
	"flexibility to respond to eventualities".
	I reject his denial, as I have already rejected the Secretary of State's denial, that the Government are not seeking a blank cheque. I agree with the Minister that, as he told the other place:
	"Changes to decommissioning plans or station operation that would materially increase the nuclear liabilities would need to be authorised by the Government in advance".—[Official Report, Commons, 27/1/03; col. 587.]
	The fact is that the so-called ring-fence decommissioning fund has been seriously eroded by the unwise investment of those funds on the stock market. The fund has gone down from £411 million last April to about £300 million today.
	Parliament's job is to control the excesses of the Executive. If it wants more money than Parliament specifically grants, then it has to come back and explain itself. That is especially so with the limit removed and the Government's plans in the Bill for back-door renationalisation. The Government could find a pretext to buy up at least bits of other generating companies without coming to Parliament for the funds to do so. It will not surprise the Minister that we intend to oppose the removal of the limitations very properly imposed by Schedule 12 of the 1989 Act. We shall, however, propose substantially to increase those limits but to require the expenditure over and above the new limit to be subject to a positive resolution of both Houses.
	Clause 2(3) will empower the Secretary of State to repeal any of the provisions of the important Part 2, and to make what are described as consequential amendments to,
	"the Electricity Act 1989 or any other Act".
	As usual with the Government, it is proposed that the power be exercised by statutory instrument and subject to the negative resolution procedure, not by both Houses of Parliament but merely by either House. That is a novel ploy even for this control-freak Government, and it is simply not acceptable.
	First, if primary legislation is going to be amended by secondary legislation, it is essential that it should actually be discussed by Parliament and not slipped in under the wire just as Parliament is adjourning. Secondly, both Houses must be involved in amending the legislation. The matter must not simply be left to another place, as I suspect that the Government will attempt to do. The Government's current overwhelming majority there has reduced its function to a mere rubber stamp. Those provisions will be subject to an amendment that we shall table.
	While we are discussing that matter, I want to question the power that allows the Government to amend "any other Act". Precisely what other Acts do the Government have in mind—any other Act on the statute book, or any other Act dealing with the electricity industry? The Explanatory Notes claim that the provision is extremely,
	"narrow and would permit . . . the deletion of cross references in other Acts",
	but that is not what the Bill says. It says "any other Act", without imposing any restriction whatever.
	I look to the Government to introduce an amendment specifically limiting the words to the situation that they say that they wish to cover, with absolutely no ambiguity. I do not expect to hear the Government say, as they usually do, that that would be unnecessary. We feel that it is necessary. I urge the Government and the Minister not to put themselves and this House through the same argument about an over-wide phrase that we have had on previous occasions.
	The Bill was originally described as an enabling Act intended to deal with a unique situation. There seems to be no justification for the powers that the Government are taking under the Bill to continue indefinitely without further parliamentary scrutiny. We shall therefore propose a sunset clause.
	The Government themselves have conceded that the principle applies to the Electricity Act 1989. In the Explanatory Notes to the Bill, they refer to the provisions of the 1989 Act as,
	"in the main, long since spent".
	If after x years it is felt that the powers of the Bill are still needed, Parliament can follow the usual procedure of reviewing them from time to time.
	This hastily drafted Bill exposes the taxpayer to unlimited and uncosted liabilities and seeks to give the Government wholly disproportionate powers to intervene further and expend unlimited amounts of taxpayers' funds in the entire electricity market. We on these Benches agree that some legislation is necessary. In view of the fact that the Government have been overtaken by events, namely the approval of the restructuring plan, they should really reconsider and reshape the whole Bill. However, failing that sensible step, we will seek to amend it by removing the more unacceptable, unnecessary and unconstitutional provisions that it contains.

Lord Ezra: My Lords, when the Bill was considered in another place, the energy White Paper had not been published. Now it has been. Unfortunately, it leaves open the longer-term future of nuclear power. It would have been much easier for us to consider the Bill's implications if we had known whether nuclear power was likely to have a future in the energy policy of this country. If it has a future, we would have to regard the Bill as a stepping stone to the further development of nuclear power. If it has no future, the Bill would be the first step in the ultimate decommissioning of nuclear power. Although the Minister was quite right in saying that its specific proposals have no reference to the longer-term policy, it is nevertheless always important in such matters to consider future implications. We are left in a degree of uncertainty.
	The noble Baroness, Lady Miller of Hendon, referred to the problems that have led to the present difficulties. As she rightly stated, many of them have been beyond the compass of the company. For instance, the impact of NETA and the wholesale prices created something of a crisis in the generation of electricity, affecting not only British Energy but a number of other companies. Other problems include: the expensive BNFL contract for treating spent fuels, which is now under renegotiation; the somewhat illogical application of the climate change levy to nuclear power; and the surprising decision to charge a higher business rate on nuclear generators, which again discriminates against companies involved in nuclear power.
	Finally, there was the question of the extent to which the company itself made commercial misjudgments. The big misjudgment was not to go for vertical integration. It did not make sure that it could get the benefit of the higher proceeds from retail prices for electricity compared with the wholesale price. My understanding of the Government's philosophy on electricity generation is that they would have preferred to see a distinction between the generation of electricity as such, the distribution of electricity through the distribution networks and the supply of electricity. In fact, the only way in which electricity companies can now survive is through vertically integrating—in other words, taking advantage of the difference between the wholesale and retail prices.
	That is the mistake that British Energy made, by concentrating on the generation of electricity and not moving downstream. It is an interesting commentary on such affairs that the downstream operations of the oil companies are generally unremunerative, whereas the downstream operations of electricity companies are remunerative.
	The major issue in the Bill is whether there should be a solvent restructuring or administration. The Government have left open the possibility of administration if solvent restructuring should not come about. So far, the steps towards solvent restructuring seem reasonably positive. The real issue that we should consider is the implications of either solution on the taxpayer. On that, we are not particularly helped by the Secretary of State, who said on 28th November that there was no real difference to the financial implications for the taxpayer, whichever solution was adopted.
	We have to ponder that, as it seems that there are rather more risks with the solvent solution than with the administration solution. We do not know how the solvent solution might develop. In any event, the Government have to come in on the substantial requirement for decommissioning—they have already accepted that past decommissioning costs would be met—and on the question of how spent fuels are dealt with. Therefore, the Government would be substantially involved, whichever solution were proposed. The Government ought to be very clear about which solution they think more acceptable, bearing in mind that the Secretary of State has said that the impact on the taxpayer would be neutral, whichever way was taken. There is therefore the question of the uncertainties of one solution against another.
	Along with the noble Baroness, I am concerned about the open-ended commitment under Clause 3, which removes the ceiling of £2.5 billion in government financial assistance for nuclear liabilities such as spent fuel and decommissioning. We ought to have some figure in mind. If the Government believe that £2.5 billion is not adequate, we ought to know what is.
	To have that limit removed altogether appears to introduce substantial uncertainty into the expenditure of public funds. The Bill, limited as it is to British Energy, raises major issues about how future nuclear electricity companies, if there should be such, should be run. We must consider the role that government and the private sector should play. We are in an exceptional situation in which the problems of decommissioning, of dealing with spent fuels and of security—particularly in the present situation in the world—raise special issues from which the Government cannot withdraw. We need an indication of how nuclear stations, if there are in future to be any, should be dealt with as regards the balance between the government and the private sector, what the roles of the two should be and whether there is a role for the private sector in this uncertain and difficult area. Perhaps in our further deliberations on the Bill we will have answers to those questions. Although the Bill relates to a specific issue, it raises much wider issues, which I hope we shall address in amendments that will be introduced during the Bill's subsequent stages.

Lord Jenkin of Roding: My Lords, not for the first time, I find myself in virtually 100 per cent agreement with the noble Lord, Lord Ezra, who I suspect knows more about energy than most other noble Lords. On the Front Bench, my noble friend Lady Miller of Hendon made a powerful speech in which she drew attention to many of the shortcomings of the Bill. I shall endeavour not to repeat what my noble friend or the noble Lord said.
	The Minister referred to the temptation to address the issues in the White Paper. Like the character in Oscar Wilde's play, I can usually resist everything except temptation. However, I shall do my best to resist that temptation and that of boring everyone with a re-run of the debate on 8th January, which was initiated by the noble Lord, Lord Tombs.
	The Bill was presented in another place, as it was this afternoon by the noble Lord, Lord Sainsbury, as being necessary to deal with the crisis that faced British Energy last year, when it appeared to be running out of cash. If that was all it did, I daresay that we should be able to deal with it fairly briefly, and perhaps neither the hour that was indicated as the time for this debate nor the single day that has so far been set aside for the Committee stage would not be unreasonable. However, I warn the Minister that most of the Bill is not confined to dealing with British Energy's problems, as was starkly made clear right at the end of Third Reading in another place by the Minister for Energy and Construction. In response to a question from Mr Djanogly, he said:
	"For reasons that the hon. Gentleman doubtless understands, no public Bill can deal with a single company. The measure is generic, but we are considering BE's circumstances".—[Official Report, Commons, 6/2/03; col. 511.]
	My noble friend Lady Miller accepted the statement that because this was only an enabling Bill, it could not become hybrid, but I query that. I suspect that that rather cryptic reply from the Minister about the Bill being "generic" had more to do with avoiding hybridity than Ministers in another place have been prepared to admit. As Noel Coward might say, "Hang on to the word 'generic'!". That is what the Bill is about.
	Clause 1, as I understand it and as explained this afternoon by the Minister, is confined to British Energy. The rest of the Bill is of general application. In light of speeches made in another place and by noble Lords in this debate, I am sure that the Government recognise that there is much unhappiness about these provisions in the Bill, particularly the so-called generic provisions. I shall return to that before I conclude. We shall certainly want to deal with that, as my noble friend said, in greater detail in Committee.
	I have questions for the Minister about the rescue of British Energy. Ministers have made much of the company's misjudgment and mismanagement as being the primary causes of its financial difficulties. As my noble friend stressed, when will we hear from Ministers about the damaging impact that government policy has had on British Energy and other UK generators? The Minister used a somewhat strange phrase in his speech when he said that they were placing "excessive reliance" on wholesale prices of electricity. What on earth did he mean by that? He later hinted that perhaps British Energy would have done better to have acquired some retail distribution companies; I shall come to that in a moment. However, when he winds up, the Minister must explain what he meant by "excessive reliance". It was a very strange phrase indeed.
	NETA has had very damaging effects right across the generating industry. Some firms have been driven out of business altogether and others have been able to keep going only because they were part of a larger group with substantial retail activities so that they can offset their generating losses by recouping them from retail customers.
	It is worth noting that the Government and the regulator Ofgem boast about the 40 per cent reduction in wholesale electricity prices but that very little of that has percolated through to the electricity bills of retail customers. I suspect that most noble Lords will have recognised that. Through our electricity bills we are paying for the reimbursement of generators' losses because of the wholesale prices collapse. As the Minister made clear, British Energy has been unable to pass that on and it was therefore generating at a loss. It finds itself at the mercy of what the International Energy Agency described recently as,
	"the recent turmoil in the UK energy market".
	I accept that there has been over-capacity, partly as the result of the dash for gas. However, as I have said previously, to allow wholesale prices of electricity to fall below the short-term marginal costs of production is a recipe for disaster that is bound to end in tears. We are dealing with the result of those tears in this Bill.
	I have several questions for the Minister, to which I hope he will respond. I return to my first question, which was: will the Government now openly acknowledge the damage that this collapse of wholesale electricity prices has had on the market?
	Next, the Government require the acquiescence of the European Commission in agreeing the rescue package. It is perfectly true that it gave a very quick assent last autumn to the immediate bail out. However, I hope that I am right in believing that the rescue plans now have to go to the Commission for a more detailed assessment and approval.
	On making inquiries, I have been told that that process is unlikely to be completed until next year—2004—and that, if it does come forward, approval may not be given for as long as 18 months. I should like the noble Lord to indicate whether he considers that to be a realistic and likely timetable. If it is, what happens if, in the interim, British Energy finds it impossible for whatever reason to deliver its restructuring plan? In his speech, the noble Lord said that we are not through the woods yet. But perhaps I may say that I believe he was a little less than frank about some of the problems that he faces as he hacks his way through this particular jungle.
	That is not the only threat; others are looming. I am sure that the noble Lord's officials will have read about them in the weekend press. I quote from the Financial Times. Under the headline:
	"British Energy plan triggers backlash",
	the opening paragraph of the article states:
	"American owners of three of Britain's biggest power stations are considering joining forces with other independent generators to mount a legal challenge to the government's proposed £2.1 bn rescue of British Energy".
	That is the short-term threat. But the Financial Times article—I shall read it if I may because I believe that it is serious and disturbing—also quoted one company as saying:
	"Since the government began subsidising British Energy, several generation projects have gone into administration, while a number of others are perilously close to insolvency.
	Investors are beginning to view the political risks of the UK energy market as too high to justify continued investment, as evidenced by the significant withdrawal of US companies and investors from the UK market".
	Are the Government confident that this is no more than simply empty bluster by the American generators, who appear as grumpy competitors who may have felt that they are being short-changed? Are the Government confident that these threats can be safely ignored, or are they for real? I should like to know the Government's view of that.
	There are other implications of the Government's rescue. One result of it, as put to me the other day, is that the Government have now become a major stakeholder in the nuclear industry. The challenge to the industry is to see whether it can now deliver profitably with a realised wholesale price of electricity no more than £16 per megawatt hour. In other words, do the Government accept that this rescue of British Energy, and British Energy itself, are not to be seen merely as a temporary caretaking operation and BE a temporary caretaker company, or do the Government recognise that the company must have a long-term future, with nuclear generation accepted as being of fundamental importance in today's British electricity industry, whatever the future may be, as indicated by the noble Lord, Lord Ezra?
	If the Government's answer to that question is, "No, this is not a temporary caretaker solution; and, yes, nuclear energy has a major role to play over the next few years or even decades", then one has to ask what other measures are needed if that is to be delivered. Perhaps I may suggest that there are at least three.
	One is the need to strengthen the skills base. The noble Lord will remember that I raised that point in response to the Statement on the White Paper. But why have the Government given such a negative response to the proposal for the creation of a special skills council for the nuclear industry? Is it because at this point they are thinking big and that the nuclear industry, with only 135,000 skilled employees, is too small to warrant a separate special skills council?
	The noble Lord will remember that, in answer to my question after the Statement, he said that all that would be dealt with by the skills council. But why, then, is there no special skills council for this industry? It is not merely a question of skills for nuclear new build; clearly that is not the case. It is the case of having the skills necessary to run the existing industry. What does,
	"to keep the nuclear option open",
	mean if there are not the skilled people to make that a reality? Therefore, I should like to know more about that.
	Secondly, why is nothing being done to strengthen the Nuclear Installations Inspectorate—the nuclear regulator? Is that not essential if the rescue of British Energy is intended to help to keep the nuclear option open? Such strengthening will certainly be essential if there is to be a prospect of new nuclear build. However, we are not debating that today. But what about the process of the safe decommissioning of existing nuclear power stations? I am told that the NII does not have enough people even to do that job properly, and that is causing considerable anxiety in the industry. Therefore, I hope that the noble Lord will be able to answer my point about the inspectorate.
	Thirdly, I come to the question of nuclear waste. When will the Government move forward on the institutions and procedures leading to the safe disposal of nuclear waste? The Minister had much to say—perfectly properly because it is in the Bill—about the question of nuclear liabilities. Much of that is concerned with the legacy of waste. The new deal between British Energy and BNFL is certainly welcome, but is it more than simply a holding operation? Is it not time that the Government began to grasp the nettle and recognise that the safe disposal of waste is a high priority?
	All those questions arise directly from Clause 1 of the Bill, and they deserve answers. However, I now turn briefly to Clause 2. As I said a few moments ago, the rest of the Bill goes far wider than the woes of British Energy.
	I want to mention one matter which the noble Lord dealt with at some length in his speech—that is, the repeal of the provision of the 1989 Act banning the Government from buying shares in electricity companies. Although the Minister said that there is no present intention to invoke subsection (1), it is there in the Bill: unlimited in scope; unlimited in time; and unlimited in amount. I am afraid I do not regard that as in the least acceptable, and I do not think that this House should regard it as acceptable.
	Paragraph 31 of the Explanatory Notes seeks to be reassuring. It states:
	"It allows the Secretary of State to act like any other legal person in being able to acquire shares in a normal commercial (voluntary) transaction".
	I ask the House to consider the word "voluntary". In this context, is that not just a weasel word? It is entirely possible to envisage circumstances where government action or inaction of the kind that we have seen bring British Energy low over the past couple of years will put a company—not necessarily British Energy; perhaps another generator—into serious difficulties. Ministers can then come along posing as rescuers, wringing their hands and saying that they did not want to do that, but the company may well feel that an offer to buy its shares is one that it has no option but to go along with.
	For the company and the shareholders that is not a voluntary sale but a forced sale. That is one of the consequences of the repeal of this provision of the 1989 Act. It might be the salvation of the company concerned, but I suspect that there might be a smile on the face of the tiger on the Front Bench opposite.
	I believe that this House could reasonably insist on amendments of the kind outlined by my noble friend Lady Miller. To acquire a new electricity company which it does not own at present should not be dealt with as a by-product of this British Energy rescue Bill but in separate primary legislation aimed at that purpose. At present, as the Bill is drawn that would not be required. The Government could rely on this clause and buy whoever they like.
	Surely, the question of the repeal of other parts of the 1989 Act by resolution, by order made under the Bill, must be subject to an affirmative order in both Houses as recommended—I shall not weary the House with this—by the scrutiny committee. It is not sufficient to have a negative resolution for the repeal of parts of primary legislation.
	I also agree that there should be a sunset clause so that if this does not deliver in time the Government must come back to the House with fresh legislation, and there must be an upper limit on expenditure; otherwise, what we are given is simply an indefinite power to spend unlimited sums of taxpayers' money, and it is part of our job to stop that.
	In conclusion, I agree in large measure with the view taken by my honourable friend in another place. It is far from clear that a solvent reconstruction is better than letting the company go into administration. We have been told that the cost is the same. I regard it as wholly inconceivable that the regulators and other authorities, the administrator or whoever, could possibly allow the management of these companies to imperil safety or undermine security. To suggest otherwise is scare tactics. The Government have certainly not heard the last of this sad affair.

Lord Howie of Troon: My Lords, it gives me particular pleasure to reassure my noble friend that I welcome the Bill and support his endeavours in taking it through this House. However, like the noble Lord, Lord Jenkin of Roding, I agree to a large extent with much of what was said by the noble Lord, Lord Ezra. It is by no means difficult to agree with the noble Lord, Lord Ezra, on energy matters. He is almost always right and should be listened to with the greatest care.
	I was a little surprised at the onslaught on the Bill launched by the noble Baroness, Lady Miller. It seemed to me that she attacked it rather as though she was trying to sink the "Bismarck". The Bill is not the "Bismarck". Her speech was very critical but in one respect—when she came to what she called the Government's hidden agenda—the noble Baroness raised my hopes and spirits. I said to myself, "If only I could be sure that the Government had such intentions at the back of their minds". I have a horrible fear, however, that the noble Baroness was exaggerating.
	I do not want to say much about the Bill. However, as the noble Lord, Lord Ezra, stated, it has implications for the future. We all know that nuclear power is necessary to secure a variety of sources of energy and that it is free from carbon dioxide emissions. That is why I was particularly pleased when the noble Lord drew attention to the burdens placed upon the nuclear industry by the climate change levy—mentioned also by the noble Baroness—and the undue burden of the business rate. Such burdens should not continue to be imposed upon the industry; they should be removed.
	That apart, I welcome the Bill. It secures a future for the nuclear industry, although it does not tell us what that future is, nor indeed does the recent White Paper on energy, apart from the fact that the option will remain open. That does not tell us much that we did not already know. However, one part of the White Paper caught my attention. The chapter on transport points out that there is a future for hydrogen as a fuel for vehicles. Indeed, people are talking about the coming of the hydrogen economy. Last December, in the Foundation for Science and Technology, we were told that one gramme of hydrogen contains something like two-and-a-half times as much energy as a gramme of petrol. That is a significant increase; it explains why, if usable, hydrogen is desirable.
	However, there is a problem. Hydrogen cannot be reaped like biomass, nor can it be dug up like coal. It has to be produced by a chemical process which requires a great deal of heat. There is no likelihood that renewables could produce that amount of heat without covering vast areas of the country with windmills which some people find unsightly. They take up an awful lot of room.
	The only possible source of sufficient heat to produce the hydrogen economy is nuclear power. For that reason, if for no other the Government should change their rather negative and somewhat churlish attitude towards nuclear power. To take up a point by the noble Lord, Lord Jenkin of Roding, it is high time that the Government said something solid about the disposal of nuclear waste.
	The Select Committee on Science and Technology of this House produced a report perhaps three or four years ago, but little has happened. The Government issued a paper advising on the manner of consulting on the disposal of nuclear waste. That is not good enough. The Government must begin the resuscitation of the nuclear industry, partly by means of the Bill and partly by making up their minds to push ahead with the proposals for the disposal of nuclear waste which were clearly and simply laid out in the Select Committee report.

Lord Gray of Contin: My Lords, in the debate on the gracious Speech on 20th November I declared a number of past energy interests. However, in view of the nature of the Bill I should repeat previous interests in British Energy inasmuch as I advised Scottish Nuclear for about a year prior to its privatisation. I continued to advise British Energy, as it then was, for about 18 months after it was joined by Scottish Nuclear.
	It is a great pity that the Bill is necessary at all. None of us would have wished it. It is particularly sad for those of us who over the years have been keen supporters of nuclear energy.
	British Energy, like other generators, has come through a very difficult period during which the wholesale price of electricity has fallen by approximately 40 per cent per kilowatt-hour while the retail domestic price has remained substantially consistent. That figure, as pointed out by my noble friend Lord Jenkin of Roding, was given to the House by the noble Lord, Lord Tombs, on 8th January when he initiated an interesting debate on the electricity supply industry. The noble Lord drew our attention to the fact that the rating burden on nuclear power stations is 50 per cent higher than that on fossil fuel stations and no less than 200 per cent higher than on wind-powered stations.
	However, those are by no means the only disadvantages which government policy presents to the nuclear industry. There is the uncertainty over nuclear waste, which has already been mentioned and about which the Government have been dithering for years. And there is the cursed climate change levy, which is indiscriminately imposed despite the fact that nuclear power is not responsible for any of the pollution. This imposition has cost British Energy £100 million. Now, on top of those extra overheads, the industry will suffer from the missed opportunity of the energy White Paper. There will be other times when we can discuss that, but the indifferent press which it received highlights the general disappointment that prevails.
	The Government are totally unrealistic and over-optimistic in their estimates of the contribution to power generation from alternative sources of energy. The only consolation which the energy Minister, Mr Brian Wilson—for whom I have a healthy respect—can take from it is that the door has not been completely closed to nuclear power, and, in the company in which Mr Wilson finds himself, I suppose, he can claim that as something of a victory. It is a great pity, however, that the Government did not take the opportunity to make a clear statement on the future of nuclear power, as called for in the Trade and Industry Select Committee's report.
	Industry and the public had better prepare themselves for higher electricity prices, and power cuts too, unless steps are taken to extend the life of existing nuclear stations until new replacements can be constructed. I am relieved that there appears to be nothing in the Bill which precludes British Energy or indeed any other company from such an application.
	Alternative sources of energy can never wholly replace nuclear power, dependent as they are on the unpredictable weather for which these islands are notorious. At best, alternative sources will provide a useful back-up support.
	So, in my view, the Government could have done little else other than support the British Energy call for help. By convention, this House does not vote on Second Readings save in exceptional occasions. For that I feel thankful as I would have found it very difficult to support my party if it had decided to oppose the Bill at Second Reading, as happened in another place. It may be that amendments will be tabled. I shall study them in due course, but I agree with the principle of the Bill. I congratulate the Government for showing initiative in supporting British Energy. I say that not because I have any great sympathy with the Government's policy in general, but because, had they not taken the action they have in the Bill, the whole British nuclear programme could have been at risk.
	British Energy produced a plan for solvent restructuring as an alternative to administration, and the Government have responded. British Energy nuclear stations generate more revenue than their operating costs and it seems to me that to close them down would have been absolute folly. In any event, we have no indication of much interest from elsewhere in taking over those assets in the event of administration. We all hope that the solvent restructuring plan will succeed. Early indications are that the signs are promising. But administration has not gone away and much depends on the ultimate success of the plan.
	The Minister said a little about the Bill in the event of the plan not being successful, an eventuality that we hope will not arise. But the company in such circumstances would be in administration. Security of supply would be in immediate jeopardy. What contingency plans do the Government have in the short term for such an event?
	The noble Lord, Lord Sainsbury, assured the House that the Government do not have any plans for renationalisation. Of course, we would vigorously oppose that. In practical terms, how would further rescue plans be implemented?
	How, I ask myself, did British Energy reach this state of desperation? Since privatisation it has been a highly successful company. It has operated within the rigid requirements of the Nuclear Installations Inspectorate; it has a first-class safety record and good labour relations; it has made an excellent impression overseas; and it is respected within the industry.
	Government policies, to which I have already referred, certainly played a significant part in creating its problems, but mistakes, I suspect, may have been made in its strategy. Perhaps it was not sufficiently broad based. Perhaps it was asking too much of one person to make Dr Jeffrey both its chairman and chief executive officer. On the technical side his knowledge and experience are second to none, but in itself that demanded an enormous amount of his time and dedication.
	Furthermore, his successful negotiation of the investment programme overseas should not be forgotten. With hindsight, it might have been wiser to have had the technical and commercial expertise in different hands. British Energy is not the first company to have discovered that the joint role is not an automatic recipe for success.
	The company must now be given a chance to implement the many facets of the restructuring plan. It is to be hoped that, under the new leadership of Mr Adrian Montague, the company will recover and, in due course, fully merit the confidence that has been shown in it.

Lord Sainsbury of Turville: My Lords, I thank noble Lords for their useful contributions to the debate. This is a short Bill, but it paves the way for the Government's future response to the problems of British Energy. It has been helpful for us to have an opportunity to consider both the specifics of the Bill and the wider issue of government's approach to British Energy.
	Noble Lords have raised many issues on the Bill. However, it is important to remember that we are essentially faced with a specific situation. We have to deal with it in a practical and sensible way. I very much appreciate the words of the noble Lord, Lord Gray, who recognised that we have to deal with whether the business can be restructured or whether it goes into administration. We have to look at the matter from that point of view. I also share his view that it would be folly if this led to any kind of shut down of our nuclear capacity. Nuclear power still produces over 20 per cent of our electricity and we cannot afford that capacity to be removed.
	The noble Baroness, Lady Miller of Hendon, raised a number of questions, one of which concerned bondholders. In that context the Government set out the limits of their support for British Energy's restructuring plan on 28th November. It was for the company to reach agreement with its creditors within the limit of that support. It is a commercial matter for the creditors as to what their recovery will be under the terms reached with British Energy on 14th February.
	As regards the shareholders, the company has made it very clear that a successful restructuring will inevitably involve a significant dilution of their interest. The noble Baroness, Lady Miller, and the noble Lord, Lord Jenkin of Roding, raised the spectre of re-nationalisation. If we were trying to re-nationalise companies we would simply have let this particular company go into administration. In the circumstances of it being totally unlikely that a buyer comes forward, we could then take it over. The quite clear intention behind the arrangements which we have made is to give this company an opportunity to restructure and remain in the private sector.
	The noble Baroness, Lady Miller, then raised three areas of potential blame as regards British Energy. There is the question of BNFL and whether it is in some way responsible for British Energy's current position. Its relationship with BNFL is a commercial one between two companies. As the Minister of State for Energy and Construction said in another place, the difficulties of British Energy on the present scale came to our attention as a result of it becoming clear that the deal between BNFL, a commercial entity in its own right, and BE would not be enough to solve the problems of British Energy. There were substantial other problems involved which I have already enunciated.
	The noble Baroness and the noble Lord, Lord Ezra also raised the new electricity trading arrangements (NETA). I do not accept that the reduction of wholesale prices was a disaster, as the noble Lord, Lord Jenkin of Roding, implied. It has removed distortions which were inherent in the pool. It has helped to open up a highly competitive electricity market, which has resulted in a fall in prices to consumers. We have also seen a very substantial reduction in fuel poverty. That is in part attributable to the fall in electricity prices.
	A question was raised about the part played by the climate change levy as regards the problems of British Energy. That levy was never meant to be a carbon tax; it is a downstream energy tax designed to encourage all sectors of business and the public sector to improve their energy efficiency. In that context it would have made no sense to have taken out nuclear energy which is a large part of the whole.
	The noble Baroness, Lady Miller, raised the question of starting the Bill afresh now that restructuring is complete. But it is not complete. We have to face a situation where we can deal with a successful restructuring and also with the question of what happens if the business goes into administration. In that context it is essential we have everything in place to deal with administration in a proper and efficient way.
	She raised Clause 2, which is concerned with the removal of restrictions on the capacity to acquire certain securities. She particularly highlighted subsection (3) which I shall read because I believe it will be helpful. It states that,
	"Such an order may make consequential, transitional or saving provision (including provision modifying the Electricity Act 1989 or any other Act)".
	Noble Lords may believe that that is too wide, but it is no wider than set out in that subsection.

Lord Jenkin of Roding: My Lords, I am grateful to the noble Lord for giving way. When the Select Committee on Delegated Powers and Regulatory Reform examined this very point it said,
	"there is the potential for an order to repeal a provision, which is both 'live' and significant; in the case of the repeal of such a provision, the opportunity for a debate is, in the Committee's view, sufficiently important to require the affirmative procedure".
	Do the Government accept that?

Lord Sainsbury of Turville: My Lords, this is obviously an issue to which we shall give great and careful attention. It is extremely important and we shall take that matter on board. I was simply making the point of what is covered here. It is not an open opportunity to amend any other piece of legislation, as I believe the noble Baroness implied. In this context the issue is quite narrowly defined, as I read it.
	The noble Lord, Lord Ezra, raised the issue of restructuring as against administration. I believe that the noble Lord, Lord Jenkin, also raised the possibility that administration might be desirable. Given that almost certainly no private purchaser will come forward, the choice is between the action taken here and administration which leads to the Government taking over. In either case the Government have to take on very substantial liabilities. There is also the question of administration and its additional cost, which the taxpayer will have to take up. In any case, as a matter of government policy, we would prefer to keep the company in the private sector rather than have it taken over by the Government.

Lord Ezra: My Lords, how does what the Minister has said relate to what the Secretary of State said in that, as regards the taxpayer, there was no effective difference between restructuring and administration?

Lord Sainsbury of Turville: My Lords, the Secretary of State was making the point that there were very substantial liabilities, which probably dwarf all other costs, and which have to be taken up by the Government. There is the additional cost of administration. Either way, the Secretary of State is quite right in that very significant costs have to be picked up by the Government and they are probably more, by a substantial factor, than the other costs involved.
	The noble Lord, Lord Jenkin of Roding, asked what I meant by excessive exposure to wholesale electricity prices. I believe that that is quite clear. The noble Lord, Lord Ezra, rightly made the point that as they were wholly dependent on wholesale prices, they were vulnerable if the wholesale prices declined.
	The noble Baroness, Lady Miller, asked whether the Government were asking for a blank cheque. We wish to remove the Schedule 12 ceiling for nuclear liability support because we intend to stand as guarantor behind BE's nuclear liabilities. At this point we do not have a fixed value to put on that. However, that does not mean that we are handing over a blank cheque to the company for it to spend as it sees fit or that we are throwing money down a bottomless pit. We will provide financial support to British Energy as regards its nuclear liabilities, but we shall do so subject to a number of safeguards such as controls on decommissioning plans, proper and transparent contracting of work, and the right to take over the station once decommissioning begins. These safeguards will help to keep costs under control. We shall be looking to put in place incentives for BE to reduce costs in this area. Any significant additional expenditure would need to be approved by Parliament and through the normal supply process.
	The noble Lord, Lord Jenkin, raised the question of state aid. The Government will be submitting a restructuring plan to the Commission by the 9th March deadline. The company has always been aware that the restructuring deal would need to meet the criteria of state aids approval. We are confident that the plan that we submit will be approved. But, if the initial deal is not approved, we expect to be able to negotiate a restructuring plan with the Commission.
	The noble Lord, Lord Jenkin, asked about distortion of competition. One must deal with realities in this situation. All the economic and the nuclear safety issues point to the retention of the company and to its assets being used in some way, unless one is prepared to propose its closure. The question is whether the company should be restructured, or whether it should go into administration and be taken over by the Government. The noble Lord asked whether the situation would be temporary. If restructuring takes place, it will not be temporary. If administration takes place and the Government take over, it will be difficult to predict how long the situation will last.
	The noble Lord, Lord Jenkin, asked other questions on skills, nuclear waste and the inspectorate. They are important aspects of nuclear energy, particularly in keeping open the nuclear energy option. The Government will look at all those matters in that light.
	The noble Lord, Lord Howie, raised several points about hydrogen. He is right that, if hydrogen is to be used, an energy source will be needed to produce it. That will be an important aspect of energy policy as we progress. But it relates to energy policy rather than to the precise nature of the Bill.
	The noble Lord, Lord Gray, raised some extremely important questions, but we must deal with them in the context of future energy policy. The Bill is very much about what happens to the company here and now. The noble Lord also asked what would happen if the company went into administration and whether we had planned and prepared for it. We made it clear that, were the restructuring deal not to succeed, we would be prepared to fund an administrator to run the company in administration. The Government are being careful to ensure that plans for an administration are now in place so that the company could move swiftly and smoothly into that process if necessary. The administration would have to ensure that stations continued to operate and that nuclear safety and security of supply were guaranteed. We have now had time to put those plans in place.
	This short Bill is an important part of the Government's response to the difficulties of British Energy. It provides the tools for us to deliver our part of the company's restructuring plan. The plan appears to be progressing well at present. But, in the event that the company falters along the way, the Bill will ensure that there is a satisfactory way forward if the company goes into administration. It is a sensible, practical Bill. It is in line with the Government's overall approach to British Energy. I commend it to the House.
	On Question, Bill read a second time, and committed to a Grand Committee.

Crime (International Co-operation) Bill [HL]

Lord Filkin: My Lords, I beg to move that the Bill be now further considered on Report.
	Moved, That the Bill be further considered on Report.—(Lord Filkin.)

On Question, Motion agreed to.

Baroness Anelay of St Johns: moved Amendment No. 71:
	After Clause 80, insert the following new clause—
	"FIREARMS: INTERNATIONAL CO-OPERATION AND GENERAL DUTY OF THE SECRETARY OF STATE
	(1) It shall be the duty of the Secretary of State to facilitate the work of—
	(a) police forces in Great Britain,
	(b) the Police Service of Northern Ireland,
	(c) the National Criminal Intelligence Service, and
	(d) the National Crime Squad,
	in preventing the unlawful importation of firearms into the United Kingdom by ensuring effective international co-operation between those bodies and other foreign and international law enforcement agencies.
	(2) When the Secretary of State is—
	(a) preparing a National Policing Plan under section 36A of the Police Act 1996 (c. 16) (national policing plan);
	(b) determining objectives for the policing of the areas of all police authorities under section 37 of that Act (setting of objectives for police authorities);
	(c) determining objectives for the National Criminal Intelligence Service under section 26 of the Police Act 1997 (setting of objectives);
	(d) determining objectives for the National Crime Squad under section 71 of that Act (setting of objectives);
	he shall have regard to the desirability of ensuring effective co-operation with foreign and international law enforcement agencies to prevent the unlawful importation of firearms into the United Kingdom."

Baroness Anelay of St Johns: My Lords, this amendment would insert a new clause on international co-operation and the general duty of the Secretary of State on firearms and firearms-related crime.
	I have focused on the work done by the Home Office and the law enforcement agencies in preventing the importation of firearms into the United Kingdom. Naturally, I pay tribute to the work already undertaken in this area by the men and women of the National Criminal Intelligence Service, the National Crime Squad, the police and other law enforcement agencies—not least Customs and Excise, which is at the coalface in trying to detect those weapons.
	My amendment would require the Secretary of State to facilitate the work of the law enforcement agencies by ensuring effective international co-operation between the police forces of the UK and the authorities in other countries. It would also require the Home Secretary to have regard to the desirability of ensuring such effective co-operation to prevent the importation of firearms when setting the priorities, plans and objectives for police forces under the legislation that authorises him to set those priorities, plans and objectives.
	I asked the Government in Committee to put on the record the approach that they intend to take to the problem of firearms already in the UK and the conversion of replica weapons and airguns. The amendment seeks to prompt an explanation from the Government of what work they and the law enforcement agencies are carrying out to stop guns coming into our country from abroad. It is also a call for the Government to address the creation of a long-term strategy to prevent firearms getting into this country and on to our streets.
	In his response in Committee, the noble Lord, Lord Filkin, made some helpful comments, for which I thank him. I need to return to the issue for two reasons: first, to ask the Minister to respond more fully to matters I raised in Committee; and, secondly, to ask questions based on the facts given in the NCIS UK threat assessment 2002. I had not had the opportunity to read the assessment at the time of the Committee stage. A third reason for raising the issue is a press release from the Home Office today, to which I shall refer later.
	The Minister referred in Committee to the creation of a national computerised forensic firearms intelligence database to be used for tracking guns used in crime. It is to be run within the Forensic Science Service—a welcome development. I asked the Minister whether the tracking of those guns related only to crimes committed in this country, or whether our agencies would have access to information on guns used in overseas crime. The Minister helpfully wrote to me on the matter on 18th February. I invite him today to put his answer on the record from the Dispatch Box. In addition, what budget has been allocated for setting up the new service? Is it new money, or has it been re-allocated from another service? Finally, what is the timetable for completing the establishment of that welcome service?
	The second follow-up question relates to the Minister's comment in Grand Committee, as reported at col. EC 196 of Hansard, on the Government's intention to introduce a mandatory minimum sentence for the possession of illegal firearms. Has an amendment to the Criminal Justice Bill now been tabled in another place? Will it be an absolute mandatory minimum sentence, or will there be room for manoeuvre by the judiciary to find exceptional circumstances in which a person should not face such a sentence? I have in mind, for example, the situation of someone who legally holds a firearm but whose licence expires. In the interim period, while applying for a new licence, that person might be arrested.
	I have new queries as a result of reading the NCIS threat assessment 2002, in particular paragraph 7.16. It states:
	"The UN protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts and Components and Ammunition passed in May 2001, outlines measures to be taken by signatory countries to combat criminal possession of firearms".
	This is the important point:
	"This may encourage a rush to dispose of supplies before the protocol is incorporated into law in each signatory country".
	How are the Government preparing to deal with the dumping of firearms by governments as a consequence of the signing of the UN protocol? What mechanisms do they have in place?
	I note that the NCIS threat assessment makes the point that Her Majesty's Customs and Excise has already seized illegally imported firearms, still in their original packaging and unused, but manufactured in the 1950s. They are believed to have originated from surplus stock belonging to a foreign government.
	I noticed this morning that the Home Office had issued a press release stating that there would be a national firearms amnesty—the first, I understand, since 1996. In the context of the Bill, will the Minister comment on how the firearms amnesty fits in with the Government's general policy on illegal firearms and their prohibition on importation? I beg to move.

Lord Renton: My Lords, firearms are used in the easiest, most simple and most menacing acts of international terrorism committed by individuals who move from one country to another. My noble friend's amendment is therefore very important. The Bill would be incomplete without the amendment or something like it.
	The proposed new clause would impose a duty on the Secretary of State to prevent the importation of firearms into the United Kingdom by requiring the various police bodies to take steps to prevent their importation. The rather elaborate provisions in subsection (2) are not easy to define but my noble friend has gone as far as possible in the drafting. I hope that the Government will accept the amendment. Indeed, I hope that noble Lords in all parts of the House will feel that it is brought forward with good intentions and that something must be done along the lines of the amendment.

Baroness Carnegy of Lour: My Lords, in Grand Committee the noble Lord, Lord Stoddart, made an important contribution—he is in his place today and may enter the debate again—in which he reminded the Committee about the two Bills passed in 1997 which prevent many people from possessing firearms. In my experience, those Bills have been a disaster. Like many country people, I possess a shotgun. I have a relative who possesses a rifle. We have to lock our arms up against each other in a cupboard with numerous locks. When I see a rabbit in my garden that I want to shoot, I have to unlock so many locks that by the time I am ready to take aim the rabbit has disappeared. As that is the only thing I use my gun for, it is fairly useless.
	We know that firearms crime has risen. The Bills have failed and we have to admit it. What do the Government hope to achieve by the amnesty they have announced? Does it foretell more legislation of the kind we have had already? The previous amnesty foretold that; I hope it is not true.
	When the Minister wrote to my noble friend, he kindly sent me a letter on 18th February in which he stated that the Government could turn to Interpol to find out anything they wanted to know about weapons which had been illegally imported into this country. How successful has that arrangement been? It would be very much better if there were a deliberate attempt to find out about imported firearms in the way suggested by my noble friend's amendment.
	Will the Government know what proportion of the firearms surrendered in the amnesty have been imported recently? It seems rather doubtful that they will, but there may be a way of finding out. That would be important. If the Government do not like my noble friend's amendment, perhaps they will tell us why.
	The Government are not confronting this problem well. The previous legislation was a failure. We do not want this Bill also to be a failure in regard to arms from overseas.

Lord Lloyd of Berwick: My Lords, in a very brief appearance in Grand Committee I, too, supported the amendment. I do so again today. I would much rather see this amendment on the statute book than the proposed minimum sentence of five years for illegal possession of firearms. The important point is that it is a mandatory minimum sentence, which is particularly odd as the maximum sentence for the offence is seven years. It hardly gives a judge much room for manoeuvre if the minimum sentence is five years and the maximum sentence is seven years. Surely it would be better to increase the maximum sentence rather than impose a mandatory minimum sentence. But that may be for another day.

Lord Stoddart of Swindon: My Lords, I, too, support the amendment. It is good that it has been brought forward again because it makes it quite clear to the Government that Parliament as a whole—or certainly this House—is very concerned about the real problem with gun crime in this country—that is, the importation of weapons. As I said in Grand Committee, the Government have tended to concentrate on removing weapons from the possession of upright, decent citizens, including policemen, which they use for target shooting. They seem to have forgotten about the real culprits, the gangsters who kill people on our streets and in our various communities.
	I hope that the Government will take the amendment seriously. I do not know whether the noble Baroness, Lady Anelay, will press it to a Division, but if she does I shall certainly vote for it. It would be valuable to have on record the view of the House.
	I am concerned about the amnesty because it does not treat the subject seriously. In my view—I may be wrong—the only people who will hand in their guns under the amnesty will be those who perhaps kept them when they should have given them up previously. But they are not the kind of people who will use them. The kind of people who use weapons for intimidation, threat and murder will not give up their guns. Once again, it will be the comparatively innocent who conform to the amnesty.
	I hope that the Government will turn their attention from toy guns and removing firearms from those who use them responsibly and legitimately towards cracking down with everything they have got on those people who have firearms to use in crime and, above all, to kill people. That is why I hope that the noble Baroness will press the amendment and that it will be successful.

Lord Clinton-Davis: My Lords, the amendment does not add anything to what the Government are already doing. It is full of aspirations, and that is all. My noble friend is well advised at the moment in regard to doing something about international crime. When I was a Minister, we also considered the importance of dealing with international crime.
	So what does Amendment No. 71 say in that regard? It refers to the desirability of,
	"ensuring effective co-operation with foreign and international law enforcement agencies",
	and so forth. But that happens already. While I express general support for the underlying principles, they do not have to be incorporated in the Act. Everything proposed in the amendment is being undertaken by the Government. I hope that their efforts will be crowned with success. The importance of dealing with international crime by international measures is a salient point of the Bill. It is no good denying that.

Lord Renton: My Lords, before the noble Lord, Lord Clinton-Davis, sits down, is it his view that the matter is already dealt with and is supported by provisions already in the Bill or is he relying on legislation outside the Bill?

Lord Clinton-Davis: My Lords, I know that the noble Lord, Lord Renton, is always anxious to interrupt anything I say. No? Then I have been misinformed all these years.
	The Bill is all about international co-operation. The steps that I outlined are enumerated time and again in the Bill and in practice. Practice is even more important.

Lord Carlisle of Bucklow: My Lords, I support every word said by the noble and learned Lord, Lord Lloyd. I hope that the Government realise that the minimum mandatory sentences that they propose will be unacceptable to many people. Far more would be achieved in the area of gun control by preventing the importing of guns into this country rather than worrying about mandatory sentences which, as the noble and learned Lord, Lord Lloyd said, will be unnecessary in these circumstances.

Lord Filkin: My Lords, I support the intention of most noble Lords about how, as a society, we seek to make further successful efforts at eradicating the unlawful and dangerous proliferation of guns in our society. I do not differ from noble Lords who have spoken one iota on that, but I seek to illustrate, for two reasons, why I believe that this Bill is not the appropriate legislation for dealing with that issue. First, the Bill is concerned with putting into legislation the Schengen convention, which we have discussed many times. Secondly and perhaps more profoundly, either the Government have already taken action to provide adequate legislation to address these issues or we are clear as to what else we want to do in the future to do so.
	We also had a wide-ranging discussion on this matter in Committee. As I said then, the Government are wholly committed to working with their international partners to prevent the unlawful importation of firearms. I am happy to repeat the assurances that I gave in Committee for the wider audience here today. We already have some of the toughest gun controls in the world. We have been working with the police to ensure good security of legally held weapons to prevent them from being stolen, and we are looking at the need to establish stricter controls on deactivation standards.
	We are working very closely with our EU partners and with the various UN bodies. We are heavily engaged in ensuring that governments and law enforcement agencies work together as closely as possible within the varying systems so that any gaps are not exploited by those who are organising and profiting from criminal businesses. It is essential to tackle these problems as far upstream as possible. That is why the Foreign and Commonwealth Office, Her Majesty's Customs and Excise, the Department for International Development and other agencies are assisting governments and law enforcement agencies in countries which are at the head of the chain. Assistance to countries such as Jamaica, Turkey, the Balkan states, Colombia and Pakistan includes training, funding to buy equipment and help in drawing up the right legislation in those countries.
	Taking out the major players is a key objective and we are doing all that we can to support this. Unfortunately, rising levels of violent armed crime are not unique to this country. We are trying to improve our knowledge and understanding of the issues that face other countries around the world or that have been experienced by other countries and met with varying responses. Government and law enforcement officers are talking in detail with other agencies and exchanging views on what measures work with our international counterparts.
	As I said in Committee, the National Crime Squad and the National Criminal Intelligence Service play a key role in the intelligence-led approach to gun crime, in London as elsewhere. NCIS runs a national firearms tracing service, which provides intelligence on the source and use of guns used in crime.
	That will be complemented by a new national computerised forensic firearms intelligence database set up with £1.4 million funding from the Home Office. It will be run within the Forensic Science Service. It will help track the provenance of guns and ammunition used in crime and will be able to identify any links with a gun which may have been used in a number of crimes. The noble Baroness, Lady Anelay, raised that issue and she will recognise this as a crucial element of our attack on the problem.
	In Committee, the noble Baroness, Lady Anelay, asked whether the database would include information on guns used in crimes overseas. As I said in my subsequent letter to the noble Baroness, I confirm that this is essentially a domestic service for tracking weapons that come to the notice of a UK police force. Of course, NCIS can turn to Interpol for information on weapons that have come from abroad. I shall speak to that issue in more detail in my response.
	In Committee, I referred to the changes that we intended to make in the Criminal Justice Bill. Although this is not the time to discuss them in detail, it might be helpful if I clarified our intentions. We propose to include in the Criminal Justice Bill a provision which will introduce a five-year minimum sentence for the illegal possession of prohibited weapons. We also intend as part of the Anti-Social Behaviour Bill to make it an offence to possess an air weapon or an imitation firearm in a public place without lawful authority or reasonable excuse. We shall also be taking measures to ban the sale, manufacture and import of firearms using self-contained air cartridge systems, such as Brocock, and to license those already held.
	The objectives of the National Criminal Intelligence Service already require it to,
	"provide high quality assessments and actionable intelligence in order to increase disruption of criminal enterprises engaged in other forms of serious and organised crime . . . and maximise mutual support and co-operation with law enforcement agencies at . . . international level".
	I am sure that the noble Baroness acknowledges that those NCIS objectives are already clear and explicit.
	Similarly, the National Crime Squad is already tasked,
	"to dismantle or disrupt criminal enterprises engaged in other forms of serious and organised crime . . . maximising co-operation with law enforcement agencies at . . . international levels".
	It is already there.
	The National Policing Plan already identifies, as it should, gun crime as a high priority for all police forces and refers to the critical role that they play in tackling it.
	Therefore, there are three clear illustrations of where this is quite rightly on the explicit agenda and obligations of those bodies. Amendment No. 71, while useful for provoking a debate, would repeat what is already in operation.
	I turn now to the UN Protocol against the Illicit Manufacturing of and Trafficking in Firearms adopted by the General Assembly in May 2001. It was one of three protocols signed at that time, and it was signed by the UK in 2002. The protocol is an important move towards better international regulation of small arms transfers. It creates tough international controls on the movement of firearms and increases international co-operation among police and Customs.
	As I said when I responded to questions about why we were setting up our own domestic system, both domestic and international efforts to reduce illicit trafficking rest on the ability to track and trace individual firearms. The protocol will require firearms to be uniquely identified, and the marking of all newly manufactured firearms, as required by the protocol, will be a useful law enforcement tool. I know that the noble Baroness, Lady Anelay, understands that and the thrust of her amendment is whether there would be a danger of a flood of importation in advance of the measure being put in place.
	We are alert to that risk. We have no intelligence or other evidence so far that there is a serious risk. However, we would be foolish if we were complacent—our police forces and Her Majesty's Customs and Excise are on alert. At present, our position is that while this is a possibility, there is no evidence to signal a major threat. However, we would be foolish if we did not recognise that we could be wrong, which is why HMCE are in clear recognition of the importance of tracking that and being alert to it.
	Perhaps I may touch further on gun smuggling. While we are not complacent about the risks of further smuggling of firearms, currently the majority of weapons recovered from domestic crimes have been obtained domestically or are converted weapons. The evidence that the police intelligence services have is that the guns being used or displayed within Britain are here as a result of the sources I have signalled. Customs does and will work closely with NCIS and respond to any intelligence from domestic and overseas sources to seek illegal weapons sought to be brought in. In the past 10 months, Customs has made four seizures of significant assignments of weapons. That was made public in the response of my honourable friend John Healey to a question asked by Peter Kilfoyle.
	The firearms amnesty is a piece of common sense. If one is looking to strengthen the laws to make the carrying of firearms, or their use, more strictly prohibited, it makes sense now to enable anyone who has a gun, whether legally or illegally acquired, to be able to get rid of it and put it into the hands of the police. One is not Pollyanna-ish about this. One does not expect that it will crack the problem. Although previous gun amnesties have made a contribution, they do not transform the situation. However, if only 1,000 guns are removed from use, it is worth doing. None of us would contradict that.

Lord Clinton-Davis: My Lords, before my noble friend concludes his remarks, will he comment on the co-operation which currently exists between our police forces and other agencies and the international law enforcement agencies? I understand that the situation is satisfactory but not beyond improvement.

Lord Filkin: My Lords, I shall seek to respond to my noble friend's questions in the course of my responses. I will not rise to the temptation to talk in detail about the Criminal Justice Bill or any amendments which might be, but as yet have not been, tabled to it. We will have plenty of opportunity to debate those issues and I am sure that this House as ever will give them full measure as a consequence of its scrutiny processes. I am advised that the amendment to the Criminal Justice Bill to which reference was made has not yet been tabled. I note the points about minimum advocacy standards and I shall leave it to my noble and learned friend Lord Falconer of Thoroton to respond to those issues when the Bill is introduced into this House.

Lord Renton: My Lords, before moving on, would the noble Lord be good enough to answer a question? It seems to be the Government's intention to get this Bill, which is urgently needed, through Parliament as soon as possible. However, the new Criminal Justice Bill has not yet been introduced and there could be a big gap between obtaining Royal Assent to each of the two Bills.

Lord Filkin: My Lords, I should be pleased if we were able to pass a Bill with which this House was content. We are not making too bad progress, while giving it further and proper testing. As regards the noble Lord's proper anxiety that we might be slow on the Criminal Justice Bill, I am confident that we shall be seeing the Bill in all its glory before not too long. There will not be massive delays between the two Bills. This House and the other place permitting, the intention is that they will be passed within this current Session of Parliament.
	The noble Baroness, Lady Anelay, asked about the national firearm forensic intelligence data base. A new computerised Home Office funded data base is being established which will help trace guns used in crime. It is being set up with £1.4 million of Home Office funding and it will go fully live in April 2003. We are also providing additional funding of £500,000 in 2003–04 for police forces to increase the number of seized firearms which they submit for forensic examination. The noble Baroness asked whether that was new money or old—it sounds a little like "Aladdin"—and I am pretty certain that it is new. However, I shall write to her to put the matter beyond doubt. If she will take that as a holding answer, I shall confirm the position in writing.
	I have signalled the prospective measures in the CJS Bill and do not want to excite the House to debate them further. I want to comment, as required, in response to the questions asked by my noble friend Lord Clinton-Davis about international co-operation. I shall comment briefly on Interpol and firearms. As part of Interpol's anti-terrorism branch, the arms section was initiated to suppress international firearms proliferation. The arms section focused on joining with Interpol member countries to create an atmosphere of sharing information that will result in the elimination of firearms trafficking and the violent crime associated with it.
	An example of Interpol's international co-operation exchange of information to combat firearms proliferation is the Interpol weapons and explosives tracking system, commonly referred to as IWETS. It is the only international analytic data base designed to collate information on illegal firearms trafficking and it provides current indexes of firearms manufacturers and other information that facilitates the identification of firearms.
	My noble friend Lord Clinton-Davis clearly signalled that there is always more that can be done. I do not challenge that for a second. I do not believe that the concern in the Home Office at present mirrors the concerns felt in large parts of British civil society; that we do not like what we are seeing in terms of the increased casual carrying of guns by young people which, in a sense, is as bad as the regular use of them in criminal activity. That is why we believe that the CJS Bill is needed, but I shall leave that for another day.
	In terms of other general co-operation, the UK passes intelligence to Europol on a regular basis and clearly Europol and Interpol work closely on these issues. I could speak longer but the House would not thank me for doing do. I respect the intention behind this short debate but do not believe that this is the place for legislative changes. There may be subsequent opportunities to discuss them, but I fully recognise the need for the Government to continue to bear down on this issue with maximum energy.

Lord Sandberg: My Lords, before the Minister sits down, will he clear up a point he made earlier in regard to international problems? I could understand his references to Jamaica and Colombia; however, I could not quite understand his reference to Pakistan. Please will he clarify that point?

Lord Filkin: My Lords, I cannot say much more than I already have. In essence, it is one on a list of countries that we have where we think there are high risks. I should be pleased to write to the noble Lord giving more detail about why Pakistan sits in that position.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister for his response, although it is disappointing in some respects. This is an amendment that gathered momentum in its progress through Grand Committee and subsequently today.
	On an important matter of detail, I thank the Minister for his care in answering the further questions that I put today with regard to the national firearms intelligence database. I welcome his offer to write to me as regards the budget for that, which will be most helpful.
	I thank the Minister for his comments on policy generally with regard to the holding of firearms— particularly illegal firearms—and for the fact that the Government are on the alert with regard to the possible dumping of firearms as a result of the UN protocol. These are uncharted waters, if I may mix my metaphors somewhat badly. It is a matter of needing to be on the alert. We shall naturally be asking particular questions about that as the time proves right.
	I am grateful to the Minister for the limited comments he was able to make on the important matter of the amnesty announced today. That does not get round the general principle underlying the amendment; namely, the provision of a constructive framework within which there is a clear direction to the Home Secretary as to how he should act in these important matters.
	I was grateful to my noble friends Lord Renton and Lady Carnegy, to the noble and learned Lord, Lord Lloyd of Berwick, and to the noble Lord, Lord Stoddart, for their support. The noble Lord, Lord Stoddart, made the point that the amendment gives the House an opportunity to show support and express its concern on these matters, and the fact that it is to the illegal importation of firearms that we need to direct our attention as much as anything else. That is an important issue.
	I understood exactly the point made by the noble Lord, Lord Clinton-Davis. He was careful to say that the aspiration of the clause is a good one. But he argued, as the Minister did, that the amendment does not need to be on the face of the Bill because it will be done anyway.
	The Minister will be aware that the Government have sometimes taken the opportunity to "Christmas tree" the Bill, but in a very proper way. We supported them on their amendments relating to terrorism property freezing orders, which were not to the core of the original purpose of the Bill but properly came within the Long Title. We wholly supported the Government's activity in that area. The Minister said in Grand Committee that it was appropriate to take the opportunity, when a Bill such as this came along, to do something that was right. I agree with him, and I have to take exactly the same line with regard to this amendment. I believe that it is right and I should like to test the opinion of the House.

On Question, Whether the said amendment (No. 71) shall be agreed to?
	Their Lordships divided: Contents, 69; Not-Contents, 158.

Resolved in the negative, and amendment disagreed to accordingly.
	Clause 82 [Foreign surveillance operations]:

Lord Filkin: moved Amendment No. 72:
	Page 55, line 28, leave out "corresponding Scottish legislation" and insert "Regulation of Investigatory Powers (Scotland) Act 2000"

Lord Filkin: My Lords, I hope, as I am sure will be the case, that the House recognises that this is an example of where we have listened to comments made by Opposition Members in Committee. We are pleased to bring forward these technical amendments, clarifying and simplifying the number of references to the Bill's application in Scotland. The last amendment in the grouping, Amendment No. 92, also defines an officer in the United Kingdom.
	Amendments Nos. 72 and 91 reflect the need for consistency in the Bill when directly referring to a particular Act—in this case, the Regulation of Investigatory Powers (Scotland) Act 2000. Amendment No. 92 simply defines "UK officer" as now referred to in the revised Section 76A(1)(c) in the redrafted Bill prepared for Report. It makes it clear that the police, Customs, NCIS or NCS will be taking over this sort of surveillance. In addition, it takes account of the Committee's view that the formulation previously proposed was insufficiently transparent, if I may use that phrase. The amendment refers to the Scottish Crime Squad. Section 9 of RIPA (Scotland) enables the Scottish Crime Squad and any successor to conduct authorised surveillance.
	The new drafting will cover the operational and intelligence groups—the OIG—of the Scottish Drug Enforcement Agency, which have taken over the functions of the Scottish Crime Squad. The wording also ensures that Section 76A would cover any other joint operation that might be established under any future collaborative agreements between Scottish police forces and would perform the same function as the OIG.
	The OIG is a joint operation established by agreement between the chief constables of the Scottish police forces under Section 12 of the Police (Scotland) Act 1967. It took over the work of the Scottish Crime Squad and undertakes similar activities to those of the National Crime Squad.
	Section 9 of RIPA (Scotland) enables the Scottish Crime Squad and any other joint operation established under Section 12 of the 1967 Act which fulfils similar purposes to conduct authorised surveillance. Accordingly, as the OIG performs similar purposes to the SCS, it, too, is authorised under RIPA (Scotland) to carry out surveillance. If the OIG's surveillance function were to be replaced by another joint operation established under the 1967 Act, this, too, would be able to conduct authorised surveillance under RIPA (Scotland) because of Section 9.
	Paragraph (c) of the last amendment is reworded to remove the previous confusion and to ensure that Section 76A will apply where the OIG or any successor cannot physically take over surveillance when the foreign officers arrive.
	Similar provision need not be made for NCIS or NCS because they are statutory creations. If they were to be reformulated or replaced, primary legislation would be needed, which could include a consequential amendment to change the references to them here. I beg to move.

Baroness Carnegy of Lour: My Lords, I am sure the House will be grateful to the Minister for bringing arrangements in Scotland in line with those for the rest of the United Kingdom. This is another example of the interesting process that has to take place when European framework decisions have to be implemented in our country where the police and related agencies are devolved matters, as well as the need to apply European decisions to jurisdiction.
	It is a great relief to see that the corresponding Scottish legislation, which was in the Explanatory Notes and still in the Bill in Committee, is no longer a sign of "Watch this space" but has turned into the relevant Act. I am sure we are all very grateful to the Minister.

Lord Dholakia: My Lords, I have a small question for the Minister. Amendment No. 92 clarifies that a United Kingdom officer means a member of a police force, a member of NCIS, a member of the National Crime Squad and Customs officers. Immigration officers have certain policing powers in the course of the functions they carry out. Does this apply to foreign officers and, if so, should they be included in the amendment?

Lord Filkin: My Lords, our judgment is that there is no need for immigration officers to be included under the amendment; they are not relevant to the thrust of it. I shall be happy to explain that in more detail in a letter.

On Question, amendment agreed to.

Baroness Anelay of St Johns: moved Amendment No. 73:
	Page 55, line 28, at end insert—
	"( ) In subsection (1)(c) it is "not reasonably practicable" for a United Kingdom officer to carry out the surveillance in the United Kingdom only if the duration of the foreign police or customs officer's travel to the United Kingdom is shorter than could reasonably allow for arrangements to be made for a United Kingdom officer to carry out surveillance."

Baroness Anelay of St Johns: My Lords, with the Government's previous group of amendments, we have reached the controversial part of the Bill to do with hot surveillance. The Government have made some very helpful concessions to points we made in Grand Committee. I should like to make it clear to the House, as I have already done to the Minister's office, that the Minister's reply to the amendments that I have tabled to Clause 82 today will need my careful consideration between Report and Third Reading. I am using all my amendments on Clause 82—I stress that it is just on Clause 82—to elicit as full and clear a picture as possible of the legal position on hot surveillance. I am trying to achieve clear signposts, for the public and the lawyers who advise them, with regard to potentially significant changes to the law.
	This is one of the complex outstanding issues. We may be dancing on the head of a pin, but we need to get the issue out of the way before Third Reading.
	Amendment No. 73 is a modified version of an amendment that I tabled in Grand Committee. It would place on the face of the Bill a version of the Home Office's explanation of the effect of acceding to the Schengen agreement, given three years ago. In the original version of the Bill, the test proposed by the Government for allowing hot surveillance to be carried out by foreign officers was:
	"it is not reasonably practicable in those circumstances to request a person in the United Kingdom to apply for an authorisation under Part 2, or the corresponding Scottish legislation, for the carrying out of the surveillance".
	As amended by the Government in Grand Committee, that test now reads:
	"it is not reasonably practicable in those circumstances for a United Kingdom officer to carry out the surveillance in the United Kingdom in accordance with an authorisation under Part 2 or the corresponding Scottish legislation".
	That is not just a shifting around of words. There is a significant difference between what the Government said when they acceded to Schengen about the circumstances in which hot surveillance would occur and what the noble Lord, Lord Filkin, said in Grand Committee.
	The noble Lord rightly said that the Government did not want to run the risk of being unable to take over surveillance operations because of unforeseen and insurmountable difficulties. However, his list of such possible difficulties appeared to amount to the possibility of a dead mobile telephone battery. I teased him about that at the time, although it was a serious teasing. I have tabled the amendment to give the Government the opportunity to explain more fully the reasons behind their decision to amend the criteria in the Bill and to depart from the assurances given at the time of the UK's decision to accede to Schengen. I should like a fuller explanation of the scenarios in which they envisage that it will not be reasonably practicable for UK officers to carry out surveillance. In particular, I would be grateful for some further details on what the Government consider to be sufficient time for the authorisation to be sought and a UK team to take over the surveillance. I beg to move.

Lord Filkin: My Lords, in considering the effect of the amendment, I note that account has been taken of the operational requirements on which the Government's change in approach is based. However, the Government are still not fully clear about what the amendment would achieve beyond the current wording of the Bill, although the noble Baroness, Lady Anelay, has signalled—I think without prejudice to further consideration—that in essence it is a probing amendment to place clearly in Hansard exactly where we stand on these issues.
	As we discussed in Committee, the wording of the amendment draws on that used in the UK's original Schengen application in 1999. However, as I said during the previous debate on this amendment, consultation with operational agencies identified that, although UK officers will in most cases take over the surveillance operations—that is clearly our wish—situations may arise that would make implementation difficult if we continued to maintain our original approach.
	Defining "reasonably practicable" purely by reference to the overseas officers' journey time would simply create more problems and uncertainty. Enforcing a condition such as the one proposed in the amendment would be very difficult.
	The provisions cover three different circumstances. The first is when the foreign officers are unable to seek prior authorisation. Because of the UK's geography, such circumstances are likely to arise only very rarely, but it is possible to envisage occasions on which radio or telephone equipment fails—despite my being teased about that in Committee. Perhaps more seriously, one could envisage a situation in which the National Criminal Intelligence Service had been evacuated as a consequence of an emergency. Such situations may appear unlikely and we hope they would be very rare, but they are not beyond the bounds of possibility and we would be foolish to leave ourselves without a legislative opportunity in those circumstances.
	The second situation is when a prior request for authorisation is made, but there is insufficient time to secure the authorisation in the United Kingdom. The third is when the request is made and authorised, but there is insufficient time to arrange for a UK team to be in place at the border to take over the surveillance.
	Although the revised amendment appears to try to cover the last two situations, the first one would fall outside the wording proposed. The improbability of such situations is not sufficient grounds for ruling them out when making arrangements for surveillance operations dealing with serious crimes. The amendment would make the clauses unworkable in those rare cases.
	Since Committee, the Government have reflected and tabled some amendments to put some of the conditions on cross-border surveillance on the face of the Bill, as we were urged to do. However, our position on this amendment has not changed. We still consider that the condition should not be explicitly stated on the face of the Bill, because of the operational and practical difficulties of defining "reasonably practicable" in this way. Section 76A(1)(c) already makes it clear that the section applies only if it is not reasonably practicable for UK officers to take over the surveillance when it arrives in the UK. That means that the section applies only in the urgent cases envisaged by Article 40.2. If the foreign officers could have rung up sufficiently far in advance to give a UK team enough time to take over the surveillance but chose not to do so, the section will not apply. Similarly, if they ring but the UK authorities do not try to put a team in place for particular reasons—for example, if they are stretched elsewhere—the section will not apply. In both cases, it would have been reasonably practicable in the circumstances for a team to take over the surveillance.
	Further, the amendment appears to envisage that the time it would take a UK team to take over the surveillance will be fixed. It will not. It will vary depending on a number of factors, including the resources required for that surveillance. For example, a foreign officer might ring up from Calais and say that he is about to follow a suspect to Dover. Sometimes it will be possible to put a UK team in place to meet him, but sometimes it will not. The circumstances may be the same in both cases, but different operational pressures may obtain in the United Kingdom.
	That is the effect of the clause as it stands and accordingly we consider that defining "reasonably practicable" by reference to journey times is unnecessary and unhelpful. I understand that the amendment was probing.
	Clause 82 implements the requirements of Article 40.2 of the Schengen Convention for officers from one member state to be allowed to cross a border to conduct unauthorised surveillance in another Schengen state for up to five hours in exceptional circumstances. When the UK applied to Schengen, we chose to opt into this provision, because UK law enforcement sees it as a key operational development in the fight against organised and international crime.
	Clause 82 ensures that the surveillance that the foreign officers will be carrying out is lawful. As I have said, we do not expect such urgent situations to arise often. Most cross-border surveillance operations under Schengen will be pre-arranged.
	I hope I have given a sufficiently full explanation to the probing amendment and, at least in part, given the noble Baroness the information that she seeks.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister for his helpful response to my probing amendment. He has expanded helpfully on the circumstances in which hot surveillance may be necessary, when we cannot get our own security teams in place. He pointed out that the Government do not want to put all the conditions of Schengen on the face of the Bill. Neither do I. There are some that I accept would not properly appear on the face of the Bill, but which the Government still need to explain properly at the Dispatch Box. The Minister has done that admirably. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Anelay of St Johns: moved Amendment No. 74:
	Page 55, line 37, after "party" insert ", which is an offence under the law of any part of the United Kingdom"

Baroness Anelay of St Johns: My Lords, the clause inserts new Section 76A into the Regulation of Investigatory Powers Act 2000. It allows foreign police or customs officers to conduct the hot surveillance operations that we have been talking about. They can do that in respect of persons who are suspected of having committed a relevant crime. That is defined in subsection (3) as one that,
	"(a) falls within Article 40(7) of the Schengen Convention; or
	(b) is crime for the purposes of any other international agreement to which the United Kingdom is a party and which is specified for the purposes of this section in an order made by the Secretary of State with the consent of the Scottish Ministers".
	This probing amendment relates to the second of those definitions and seeks to limit such crimes to those that are offences under UK law. The amendment was debated in Grand Committee on 29th January, when the noble Lord, Lord Filkin, attempted to reassure us that any future international agreements and any orders made by the Secretary of State would be subject to parliamentary scrutiny. He also said:
	"Subsection (3)(b) gives the Government flexibility should we wish to join a new international agreement that included provisions on cross-border surveillance. It is likely that any such agreement would take a similar approach to Schengen and refer to generic offences".—[Official Report, 29/1/03; col. GC 210.]
	The Minister did not take up my invitation at that point to give specific examples of offences that are not crimes under UK law that might be investigated in the UK as a result of the inclusion of this provision in the Bill. With the Extradition Bill coming down the tracks at us at a rate of noughts—I am grateful to the noble Lord for saying that he will hold a briefing meeting on it in just over a week; that is always helpful—I have to ask what will be the effect of this provision. What sorts of generic crimes might we be dealing with here? Will the effect of this provision be to enable foreign police officers to conduct surveillance when in the UK in respect of acts that are not criminal under UK law? I beg to move.

Lord Carlisle of Bucklow: My Lords, I have put my name to this amendment. If foreign police officers are to carry out operations in this country, I believe that it must be in relation to a matter that is a crime within this country. I know that that is the Government's intention, as stated by the Minister in the debate in Committee. I also understood him to say that all crimes mentioned in the Schengen agreement are in fact crimes in this country. However, as my noble friend Lady Anelay pointed out, there is the possibility that, because of the power which the Bill gives the Secretary of State to extend the agreements by order, the police force of another country could have power to carry out surveillance of someone in this country, even if only for a short time, for an act that was not a crime in this country. That seems wrong in principle, and, unless there is any objection, we should say so in the Bill.

Lord Renton: My Lords, I, too, support Amendment No. 74. However, I am rather puzzled by the drafting of Amendment No. 87, which the Minister undoubtedly has tabled with good intention. I think that I shall have to read the beginning of the amendment to make the point. It states:
	"The condition in this subsection is satisfied if, immediately after the officer enters the United Kingdom . . . he notifies a person designated by the Director General of the National Criminal Intelligence Service of that fact".
	The expression "of that fact" is one that does not often occur in legislation. Indeed, I find it a little difficult to decide to which "fact" the amendment refers. Is it the officer entering the United Kingdom? Is it the notification by the person designated by the Director General of the National Criminal Intelligence Service? Which of those two factors is the fact? Or is it another fact already referred to in the Bill?

Lord Stoddart of Swindon: My Lords, this amendment is about the surveillance of those who are perhaps being surveilled because of an offence in another country that is not an offence in this country. It is a very important point. I know that the Extradition Bill contains a list of 32 offences in relation to the European arrest warrant, but the point is still extremely worrying. We have heard about stealth taxes, but it looks now as though we might be on the road to stealth criminal offences—which is even more serious than stealth taxes.
	I have just been thinking about this, and I am intrigued by my own thoughts. We may, of course, have a situation in which a foreign police officer comes over here for five hours for a surveillance operation and says, "This is the time when we have to nab this chap". So he calls in a British policeman. He says to the British policeman, "I want you to arrest this fellow because he has committed such and such an offence". The British policeman, sharp as ever, says, "Yes, but I am afraid that that is not an offence in this country. How can I arrest him for an offence that I do not believe is an offence in this country?" It is intriguing to think of the position in which that will put British policemen. I should like the Minister to think about that for a moment, and perhaps to let me know how this potential difficulty will be resolved.

Baroness Carnegy of Lour: My Lords, it is not only British policemen who may be surprised about the acts for which they have to arrest people. The public will be surprised if they find either a foreign policeman or one of their own police arresting someone for an offence that is not an offence in this country. So that the public may have confidence in this whole procedure, it should be possible to tell them that the offences for which people can be arrested are in fact crimes in this country. If the Minister can tell us that the arrangements in the Bill will not apply, because of an agreement, to offences that this country has not made offences, then, fair enough, Amendment No. 74 may not be necessary. If he cannot do that, I think that the public may be very anxious, as may be the police.

Lord Clinton-Davis: My Lords, I am confused by the remarks that have just been made, particularly those of the noble Baroness, Lady Carnegy. In my view, if the Government enter into an international agreement to which the United Kingdom is a party, that is that—the act is a crime. Is not that agreement binding on all our citizens?

Lord Filkin: My Lords, before responding to the important issues raised in this amendment, I should like to thank the noble Lord, Lord Renton, for notice of the point that he will raise in the next debate. That was most helpful to us, and we shall come to those points shortly.
	This amendment seeks to restrict any subsequent extension of these arrangements to agreements other than the Schengen convention. It will mean that if we wanted to enable this type of surveillance to be carried out in respect of another international agreement besides the Schengen convention, we could do so only if the crimes specified within that further agreement were also crimes in the UK. I am aware from the debate in Grand Committee that there is some concern about this subsection, but, in the Government's view, it strikes the right balance between the need to allow for any new agreement to be brought into effect and proper parliamentary oversight.
	As I explained in Committee, subsection (3)(b) as drafted gives the Government the ability, should we wish—I emphasise the words "should we wish"—to join a new international agreement that included provisions on cross-border surveillance. In Committee, the noble Baroness, Lady Anelay, asked what kind of offences that were not crimes in the UK might be investigated by foreign officers on our soil as a result of these provisions. At first glance, that seems a valid and challenging question. I think the answer is that the sort of crimes covered by any future agreement would be very similar to those covered by Article 40 of Schengen. They would be serious crimes. We would countenance using the provisions of Clause 82 of the Bill only in relation to serious crimes. We would not, as a matter of policy, agree to that kind of arrangement in respect of petty offences.

Lord Stoddart of Swindon: My Lords—

Lord Filkin: My Lords, if the noble Lord, Lord Stoddart, will give me a minute, I shall deal with his point.

Lord Stoddart of Swindon: My Lords, I am most obliged to the noble Lord for giving way. He said that only serious offences would be caught by the provision we are discussing. But, for example, in Germany there is an offence of holocaust denial which carries a possible prison sentence of two years. That is not a crime in this country. What would be the position if someone were pursued and subjected to surveillance in respect of that kind of crime? Or have I got the matter all wrong?

Lord Filkin: My Lords, as I signalled, I assure the noble Lord, Lord Stoddart, that I shall deal with that point shortly.
	As I said, we would seek to use the powers in Clause 82 only in respect of serious crimes. The noble Baroness, Lady Anelay, may press me further by saying that serious crimes will already be offences in the UK. She may ask, therefore, what is the mischief in her amendment. I suspect that she knows the answer to that question, which is the following. The reason for having this sort of flexibility is, of course, that we prefer to take a generic approach in legislation to one that depends on having harmonisation of offences between countries. In other words, we do not think that having an exact identity of an offence is an appropriate way of considering these issues. I am grateful for the general support from the Benches opposite for that approach. If one looks at the offences to which Article 40.2 of Schengen applies, it will be seen that they are widely drafted but clearly refer to very serious matters.
	We expect that any future agreement would take a similar approach. I do not anticipate a situation whereby foreign officers who suspect a person of committing, for instance, an offence of xenophobia, or of holocaust denial, as the noble Lord, Lord Stoddart, signalled, would be allowed to conduct this sort of surveillance in the United Kingdom. Those would not be seen as serious offences as a matter of public policy in terms of the United Kingdom's approach. I should also point out that the foreign officers would not conduct investigations in this country, as they would not, of course, have any executive powers. It would simply be a question of surveillance.
	An example of the type of crimes that might be considered in addition to those currently covered by Article 40 and discussed in the context of the Schengen convention are organised fraud, smuggling of illegal immigrants, laundering of the proceeds from organised crime, and illicit trafficking in nuclear and radioactive substances. All of those are self-evidently serious crimes. To expect to have an exact identity—in other words, explicit dual criminality—is, in our view, and, I believe, in the view of the Opposition Benches, a flawed approach because, provided one has the generic offence, one is more certain to catch the mischief that one seeks to catch. I emphasise yet again that we are talking about serious crimes in this regard. Any future agreement containing provisions of this nature would also be subject to parliamentary oversight before it could be ratified.
	I believe that I have said enough to explain the Government's position. I hope that I have answered the point made by the noble Baroness, Lady Carnegy of Lour. In essence, we are talking about serious crimes and a measure which, in effect, provides flexibility to ensure that one does not allow someone to escape because there is not an exact identity of offence, as that person would be covered by a generic offence. I hope that I have made the Government's position clear.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister for providing important clarification with regard to the part of the Bill we are discussing. I am grateful for the support of my noble friends Lord Carlisle, Lord Renton and Lady Carnegy. I am also grateful for the helpful remarks of the noble Lord, Lord Stoddart.
	I sympathised with the noble Lord, Lord Clinton-Davis, when he said that he was becoming confused. The problem with much of the Bill, particularly Clause 82, is that one is trying to follow which parts of the convention and protocols the Government wish to include on the face of the Bill and which parts they prefer to leave out to achieve flexibility, as the Minister repeatedly tells us. We recognise that it is important for the Government to retain some flexibility, although not perhaps too much, while maintaining parliamentary scrutiny when they sign up to agreements with other countries in the future.
	My noble friend Lady Carnegy made the very important point that however confusing the background to the measures may be, the provisions on the face of the Bill must be clear so that the public and the police can be confident that the provisions of the Bill will be properly put into effect. My noble friend Lord Carlisle also made an important point when he said that we must ensure that the Bill is future proof. That is essential. At the same time we must ensure that we maintain parliamentary scrutiny.
	The Minister gave me sufficient assurance to enable me not to have to bring the measure back at Third Reading. At first, I thought that I would have to do that. I shall read his comments carefully in Hansard before I say once and for all that I shall not bring the measure back, but at present I consider it very unlikely. The Minister made some helpful comments with regard to generic offences. His comments with regard to xenophobia and holocaust denial took us much further than our discussion in Grand Committee. With those words, which I hope are encouraging from the Government's point of view, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Anelay of St Johns: moved Amendment No. 75:
	Page 55, line 39, at end insert—
	"( ) A foreign police or customs officer carrying out relevant surveillance in the United Kingdom under this section shall ensure that such persons as may be designated by order made by the Secretary of State are immediately informed of the fact that the United Kingdom's border has been crossed."

Baroness Anelay of St Johns: My Lords, in moving Amendment No. 75, I wish to speak also to government Amendment No. 87. When discussing the previous group of amendments, I was intrigued that my noble friend Lord Renton, who is an expert on drafting matters, referred to the words "of that fact" in government Amendment No. 87. He made an interesting and important point. I look forward to hearing the Government's response.
	Amendment No. 75, which I shall not press, was tabled in order to continue discussion on the arguments I put in Grand Committee. I was concerned about the issue of notification by the police or customs officer who enters the UK. I wished to see on the face of the Bill the requirement that the notification should take place immediately the UK border had been crossed. That is, indeed, a condition of Article 40.2 of the Schengen convention, to which the Minister referred earlier. In Committee, the Government maintained that it would be sufficient for the requirement of immediate notification to be in an order rather than on the face of the Bill. I was not happy with that. I welcome the fact that the Government have changed their mind on the matter and have agreed that that protection should be on the face of the Bill.
	When the Minister speaks to his amendment, I should be grateful if he would make plain the definition of that part of the amendment that states,
	"after the officer enters the United Kingdom".
	Do the Government still intend that that should mean when the person physically sets foot on UK soil rather then when he enters UK territorial waters? That will have a bearing on our debates on later amendments. I beg to move.

Lord Renton: My Lords, I owe an apology to the noble Lord, Lord Filkin, for referring too soon to Amendment No. 87. It is grouped with Amendment No. 75, which my noble friend Lady Anelay has just moved. With his usual courtesy, he did not criticise me for being premature and was kind enough merely to take note of the fact that I had made the point.
	Looking back on the matter again, I still think that the expression "of that fact" on the last line of page 3 of the Marshalled List creates some uncertainty. It would help if the noble Lord could explain what it means and to what it refers. Even if he has an explanation, between now and Third Reading he should find some clearer way to deal with the point that he intends to make.

Lord Filkin: My Lords, as said by the noble Baroness, Lady Anelay, Amendment No. 87 seeks to introduce to the Bill a condition imposed on cross-border surveillance in Article 40.2(a) of the Schengen convention, so that police and customs officers contact the relevant UK authority immediately on crossing the border. I acknowledge that the amendment is a response to the powerful representations that she and other noble Lords made in our discussions.
	The amendment reflects the condition set out in Article 40.2(a) of the Schengen convention, which is that foreign police and customs officers conducting such surveillance must contact the relevant authority in the territory they enter the moment that they cross the border. If they do not, they are breaching the conditions of Schengen. That is not in anyone's interests, as the fundamental principle of Schengen co-operation is respect for national law and for any conditions attached to cross-border work. The experience of the Schengen states is that the conditions are respected. The Government had intended to add the condition in an order, but we listened to the representations made and were happy to accede to those requests.
	The noble Baroness asked about when one gets to the United Kingdom. Those words should be given their natural common-sense meaning. Accordingly, we consider that entering the UK is when the foreign officer arrives at a port or airport. For the Eurostar, it is when the train leaves the tunnel and enters Kent.
	I shall deal with the courteous question and apology from the noble Lord, Lord Renton. No apology is required, first, because of who he is and the respect in which he is held in the House, and secondly because it is extremely helpful to the Government to get advance warning of questions. Being more serious and turning to the specifics, the fact in question is the fact of entering the United Kingdom. I shall look again at the clause to see whether, on further testing and reflection, we think that it is as clear as it should be, particularly having heard the noble Lord's views. No doubt I shall give him an indication of our view before Third Reading, so that he is aware of our position on it.
	Having in essence agreed to the representations made by the noble Baroness in Committee, I hope that there will be support for Amendment No. 87 and no need to press the alternative amendment.

Baroness Anelay of St Johns: My Lords, I have no intention of pressing my amendment. I simply want to welcome the government amendment and the commitment of the Minister to consider the drafting again before Third Reading. I would not insist on that, but I am always grateful when the views of my noble friend Lord Renton on drafting are taken to heart by the Government. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 76 not moved.]

Baroness Gould of Potternewton: My Lords, before calling Amendment No. 77, I have to inform noble Lords that if it is agreed to I shall not be able to call Amendments Nos. 78 to 80 for reasons of pre-emption.

[Amendment No. 77 not moved.]

Lord Filkin: moved Amendment No. 78:
	Page 55, line 40, leave out "a" and insert "the"

Lord Filkin: My Lords, Amendment No. 84 is aimed at achieving the same effect as the government amendments, which is to ensure that the officer referred to in subsection (5) dealing with civil liability is the one carrying out "relevant surveillance". Amendments Nos. 88 and 90 seek to achieve the same clarity in subsections (6) and (7).
	The Government have listened again to the arguments in Grand Committee and tabled amendments to make it clear that the officer referred to in subsection (5) is the one carrying out "relevant surveillance". We consider that the government amendments make the position in the subsection sufficiently clear. In addition, we consider that references to "the officer" in the other subsections are obviously a reference to the foreign officer authorised by the new section. Accordingly, I would suggest that the further amendments proposed by the Opposition are unnecessary. In the circumstances, I hope that the noble Baroness will not press her amendments. I beg to move.

Baroness Anelay of St Johns: My Lords, I shall speak to Amendments Nos. 84, 88 and 90, which are grouped with the government amendments. They aim simply to ask the Government to consider the drafting, as they are intended to clarify the clause itself.
	As a result of the government amendments agreed to in Grand Committee, new Section 76A of the Regulation of Investigatory Powers Act 2000, inserted by Clause 82 of the Bill, refers to two types of officer. Those are a "foreign police or customs officer", defined in new Section 76A(9) of the 2000 Act, and a "United Kingdom officer", the definition of which is contained in the government amendment.
	I fully accept that the government amendment goes a long way towards achieving a much better drafting of the clause. I have nothing against it. I am certainly as unhappy as my noble friend Lord Renton to add extra words to legislation. I always have his caveat in my ear when I try to do that. However, the words I suggest might assist clarity if the result of the Government's decision to amend the new section is to refer to two different types of officer. My amendments make it absolutely clear that the references to an officer in the relevant subsections are to a foreign police or customs officer, not to a United Kingdom officer.
	It might be helpful if I also indicated to the Government and the House that I purposefully did not move my amendments in the preceding group. The Government will respond properly to them, and it would be otiose continually to say, "Yah boo, we got there first". I propose to say no more than one or two words when the Government deal with their Amendments Nos. 79 and 80, to point out issues to which we might want to come back on Third Reading if they have not been resolved before then.
	My amendments in this group are merely on minor drafting matters, and I hope that the Government will say that they will look at them again before Third Reading.

Lord Renton: My Lords, I support my noble friend on the amendment. We need to bear in mind that, under the law that has been our law for generations, our own police do not normally carry weapons, but there are exceptional circumstances in which they are entitled to do so. The amendment points out very well that foreign police must be subject to the same conditions if they come to this country. Subsection (4B), proposed in the amendment, makes it abundantly plain, stating:
	"The permission to carry a firearm referred to in subsection (4A) may only be given in circumstances in which it would be given to a constable acting under the law of the United Kingdom".
	We have to ensure that all the police operating in this country, whether our own or police who have come in under special circumstances, are subject to the same law on that important matter. Therefore, I hope that the Government will feel that the amendment is right in principle and clear in its expression.

Lord Filkin: My Lords, I believe that the noble Lord is inviting me to speak to the amendment that the noble Baroness, Lady Anelay, did not move. It is perhaps not right to go into that in detail but I will say that the position is explicitly clear. There is no legal need for that provision. I shall deal with that separately with the noble Lord, Lord Renton, rather than go into detail now.
	The noble Baroness, Lady Anelay, invited me to consider further. I thought that what I had said set out our reasons why we thought that the Bill, as amended by the Government in response to her representations in Committee, was adequate. I do not want to be pig headed, but nor do I want to raise her hopes unduly. We always consider her words carefully and always respond if we believe that there is a need to do so.

On Question, amendment agreed to.

Lord Filkin: moved Amendment No. 79:
	Page 55, line 42, after "if" insert "—
	(a) the condition mentioned in subsection (5A) is satisfied;
	(b) the officer carries out the surveillance only in places to which members of the public have or are permitted to have access, whether on payment or otherwise; and"

Lord Filkin: My Lords, I beg to move.

Baroness Anelay of St Johns: My Lords, I said earlier that I wanted to comment briefly on Amendment No. 79 rather than to move and speak at length to Amendment No. 76.
	I welcome the fact that the Government changed their mind with regard to putting the condition in the Bill that those carrying out hot surveillance should not enter private property. On this occasion, the Government's drafting is far superior to mine. On the previous amendment, the Government said that they did not want to be boastful but they can be here. They made it perfectly clear that the private property referred to covers every eventuality, including places to which one pays for entry. That was not covered by my amendment.
	The Minister may be aware that the Government have not fully taken on board the request I made in Committee because I also wanted to ensure that the person carrying out hot surveillance could not challenge a person or arrest them. I accept the Government's view on arrest as expressed in their letter to me but I am still concerned that there could be a temptation for a person who is carrying out hot surveillance to challenge someone in this country.
	I wholeheartedly welcome the government amendment, which is a huge advance on what we had in Committee. I may need to return at Third Reading to the issue of challenge. I should like to talk to the Minister between now and Third Reading to establish whether he can give me further information about challenge, which would obviate the need to return to the issue.

Lord Goodhart: My Lords, I rise to break my hitherto Trappist silence in this debate to say that we on these Benches also strongly welcome the government amendment, which will include in the Bill the requirement that a foreign officer carrying out surveillance cannot go into a place to which the public do not have access. I agree with what the noble Baroness, Lady Anelay, said about challenging. "Challenge" is not a concept that is recognised, so far as I know, by English law; it is presumably a term of art that arises in relation to procedures that are followed in some, if not all, mainland European countries. If the Minister is able to tell us, I should be interested to know what the concept of challenge involves. We, too, may feel that it is appropriate that that should be included in the Bill; however, that cannot be decided until we know more about it.

Baroness Carnegy of Lour: My Lords, this concession by the Government is very important because of the public perception of what will go on should someone be pursued in their midst. It will be a great help if they know that the person being pursued cannot go anywhere where they cannot go; that will give the public confidence. It will also give the public confidence to know that a foreign policeman will not be doing any challenging—whatever explanation the Minister has for that word—in their midst. These matters are very important and the assurances that it will be possible to give to the public about the Bill will very much repay the trouble that the Government are taking in this regard. It may appear not to matter very much until the time comes, but then it will matter. The public must have confidence in their legislation.

Lord Filkin: My Lords, I am very happy to respond to the invitation from the noble Baroness, Lady Anelay, to discuss with her the issue of challenge. I should not go into more detail here and now. The House would hold me to be out of order in responding to an amendment that had not been moved. I should also be pleased to find a way of sharing those considerations with the noble Lord, Lord Goodhart.
	On Amendment No. 76, it will be a challenge to respond to the challenge of trying to define "challenge" in ways that put the concern of the noble Baroness, Lady Carnegy, beyond doubt; that is, that there is no risk to the public as a consequence. However, that is for another time.
	On Amendment No. 79, as the House knows, in the case of limitations on entering private homes or places, the Government have accepted the arguments for placing conditions in the Bill. Our amendment will give effect to that.

On Question, amendment agreed to.

Lord Filkin: moved Amendment No. 80:
	Page 55, line 42, leave out "an" and insert "any"
	On Question, amendment agreed to.

Baroness Anelay of St Johns: moved Amendment No. 81:
	Page 55, line 44, at end insert—
	"(4A) Nothing in this section shall render lawful the carrying of a firearm within the United Kingdom by a foreign police or customs officer except with the permission of either—
	(a) the Secretary of State acting personally, or
	(b) a chief officer of police acting personally.
	(4B) The permission to carry a firearm referred to in subsection (4A) may only be given in circumstances in which it would be given to a constable acting under the law of the United Kingdom.
	(4C) Where the permission to carry a firearm is given to a foreign police or customs officer under this section, then that firearm may only be used reasonably and in self-defence."

Baroness Anelay of St Johns: My Lords, the amendment seeks to probe further than we could in Committee the issue of the carrying of firearms by foreign officers—police and customs officers. While the Schengen convention specifically allows firearms to be carried by officers conducting a hot surveillance, the noble Lord, Lord Filkin, stressed on several occasions in Grand Committee that foreign police and customs officers carrying out hot surveillance will not be permitted to carry firearms in the United Kingdom, despite the provisions of the Schengen convention which appear to make provision to the contrary. He made it clear at one point that he anticipated that people who tried to carry firearms could be arrested when they entered the United Kingdom.
	I make it clear that I do not wish to see firearms carried on streets of the United Kingdom by foreign police officers or customs officers but I do want to ensure that there is clarity in the law in these matters. In particular, I want to ensure that when our officers are exercising their quid pro quo rights of hot surveillance overseas, they are clear about their position and that their lives are not put at risk.
	I am grateful to the Minister for his clarification in a letter of 18th February in which he dealt with a point raised by the noble Lord, Lord Goodhart, about whether a blanket prohibition on the carriage of firearms is compatible with the terms of the Schengen convention. He wrote:
	"It is our view that a blanket prohibition, rather than a case by case consideration, is permitted by the Convention. This is because the officers conducting the observation must comply with the law of the contracting party . . . It is illegal for anyone—including overseas police officers—to bring a firearm into the UK, let alone carry it loaded on their person . . . Furthermore States that already participate in these provisions of the Schengen Convention have made blanket decisions on the type of weapons that may be carried by officers entering their territory that are applied in every case".
	I recognise that these are complex operational matters. However, I am troubled about the possibility of the situation arising in which a foreign officer's life might be put at risk because he was operating under cover but was required to surrender his firearm on entering the United Kingdom. I do not want such people to carry arms in the United Kingdom but I am concerned about the practicalities about what happens when they try to obey our laws of not carrying a firearm when he comes here. For example, if I were a foreign officer and masquerading as a member of a criminal gang—that is quite possible—I could hardly explain the need to throw away my gun as I enter the UK; that would be a dead give-away in every sense of the word. I should welcome an assurance from the Government that they had at least considered that possibility when they reflected on our debates in Grand Committee. Can they clarify whether there are any circumstances at all in which they would permit firearms to be brought into the UK by officers carrying out hot surveillance?
	Can the Minister also tell the House whether the Government have consulted our European partners who are party to the Schengen convention about their proposed interpretation and whether it is acceptable to them? On an operational level, have the Government liaised with the authorities in other member states who might expect to take advantage of hot surveillance provisions in the future to advise them of the position that the UK will take in respect of the carrying of firearms?
	We also need to know whether the Government have had discussions with other EU countries about the position of our own police and Customs officers with regard to travelling abroad and carrying firearms. I beg to move.

Lord Carlisle of Bucklow: My Lords, I support my noble friend Lady Anelay on this amendment. In Committee, the Minister said clearly that the powers available to those who carried out surveillance would not in any circumstances allow them to carry guns. But I suggest, as I did in Committee, that one must be realistic.
	If people are followed under surveillance in another country in connection with serious offences and the police who carry out the surveillance are armed, surely, in providing the right to carry out that surveillance in this country, it is unreasonable to insist that those police should not be able to be armed. That is particularly so when, as the Minister said, the British police who take over, having been given authority to do so, will, in appropriate circumstances, be armed.
	It seems to me that, as my noble friend Lady Anelay said, by requiring a foreign officer to do away with the gun which he considers necessary for his own preservation, one is unnecessarily putting his life at risk when he is carrying out his duty and doing what is allowed under the law. As I understand it, the amendment attempts to put that officer, during the period of what I shall call "hot surveillance", in the same position as a British officer carrying out the surveillance with authority. I believe that, as a form of protection, if for no other reason, we should agree to this amendment to the Bill.

Lord Goodhart: My Lords, I am most grateful to the noble Lord, Lord Filkin, for sending me the letter to which the noble Baroness, Lady Anelay, referred. In view of the facts that he set out in that letter, I do not wish to press any further the suggestion that there can be no valid blanket ban on the carrying of weapons. Given that blanket bans have sometimes been applied by a number of countries over the years, that now seems to be established as the proper interpretation of the convention, and I would not wish to challenge it. Obviously, the point raised specifically by the noble Baroness, Lady Anelay, is a matter of interest and concern for us. However, I am not sure that the amendment, as currently drafted, covers the situation that she discussed.

Lord Renton: My Lords, I have already spoken prematurely twice this evening. It seemed to me that this amendment had a bearing on an earlier one and that is why I referred to it. It is a very important amendment, and I believe that the crux of the matter lies in proposed new subsection (4B) to which I referred previously. We cannot have foreign police officers coming into this country and using powers that our own police do not have. Therefore, I very much hope that the Government will agree to the amendment.

Lord Stoddart of Swindon: My Lords, I believe that the assurances given to us by the noble Lord, Lord Filkin, are sound, valid and acceptable. I am not at all sure that I agree with the aim of the amendment, and I should be loath to agree to it without it being given much further thought.
	If it were agreed to, it would put foreign policemen in a different position from that of our own police. Our police may become involved very suddenly in surveillance operations. They are not armed and must apply to their superiors—very high-ranking officers—before that can happen. It is difficult to know how to phrase this, but I believe that it would be entirely wrong to allow foreign policemen to have what I was going to call "preferential treatment", although I do not know whether I should use those words. However, they should not be in a position different from that of our own police or, indeed, different from that of ordinary civilians in this country.
	I should be loath to support any amendment which would give foreign policemen—even for a few hours—any advantage or position which our own police would not and should not enjoy. There is considerable opposition to the carrying of arms by the police, not only among the general public but in the police service itself. I do not know how the noble Lord, Lord Filkin, intends to reply but I hope that he will think long and hard before agreeing to the amendment.

Lord Lucas: My Lords, I rather find myself agreeing with the noble Lord, Lord Stoddart of Swindon, but I read my noble friend's amendment—at least, I hope that I do—as covering the point that, in effect, we should place foreign policemen in the position that they would find themselves in were they British policemen.
	In passing this law, I believe that at the same time we should consider how we wish our special forces to be allowed to operate in other countries when they are in hot pursuit of, say, an Al'Qaeda suspect in a difficult part of the world. It is possible that, under those circumstances, we would wish them to be able to carry firearms, should it be permitted by the laws of that country.
	I believe it is entirely appropriate that we should extend to foreign policemen in our country the same facilities as we would wish to be given to our forces operating abroad. Beyond anything else, if other countries were to ban British operatives from carrying firearms, it would pose substantial difficulties for James Bond.

Lord Clinton-Davis: My Lords, I agree with the generality of the arguments adduced by those who say that police officers should not be armed, save for one thing. I am tempted to agree with the noble Lord, Lord Carlisle. I ask my noble friend what would happen if a foreign officer were obliged to join a gang, having no alternative but to do so, and found himself in a difficult position, having had to surrender his weapon. I ask my noble friend whether an exception could be made in those circumstances; otherwise, I believe that he is right in respect of this clause. But I am troubled by the situation revealed by the noble Lord, Lord Carlisle.

Lord Filkin: My Lords, I believe I may have indicated in Committee that, of all the interesting amendments tabled to the Bill, this one probably most surprised us. However, as I also said in Committee, we did not believe that, in tabling an amendment which sought to make it possible for foreign officers to carry firearms in the United Kingdom—that is what caused the surprise—the Opposition did so other than for good motives and good reasons.
	I shall seek to set out why we believe that the amendment is not right or appropriate. The amendment seeks to create circumstances in which foreign officers would be able to carry their weapons into the UK and use them reasonably and, presumably, in self-defence if the occasion arose. Our position remains the same as in Committee. We are clear that foreign officers will not be able to bring firearms into the UK while conducting cross-border surveillance operations under these provisions. I stress that we are speaking of covert surveillance, not "hot pursuit", whatever that implies in terms of chasing a person to try to arrest them—if they did they would be liable for prosecution. The law at present makes it illegal for anyone to bring a firearm into the UK without the authority of the Home Secretary and an import licence from the DTI.
	I accept that the intention behind the amendments is to ensure that officers conducting emergency surveillance are not put at risk by the fact that they will not be armed. I agree that that is an essential consideration, but I do not accept that permitting the carriage of firearms by overseas officers in that way is the best way of protecting either our officers or those from overseas, and I shall explain why.
	In circumstances where foreign officers—

Lord Lucas: My Lords, I thank the noble Lord for giving way. He referred to bringing firearms into the UK. There is nothing in the amendment about bringing firearms into the UK; it is about carrying them in the UK. I cannot see why an objection to bringing them through Customs should enter into a discussion on the amendment.

Lord Filkin: My Lords, I shall not debate semantics with the noble Lord on this point but shall seek to continue my explanation as to why we believe that the thrust of the amendment proposed for good reasons by the noble Baroness, Lady Anelay, is unnecessary.
	In circumstances where foreign officers were following a suspect who was known to be armed, an assessment would need to be made by the relevant UK authorities as to whether the suspect could be reasonably allowed to continue his journey. When foreign officers become aware that an armed and dangerous suspect they are observing is heading towards the UK, it will be in their interests to notify the UK authorities—that is, the National Criminal Intelligence Service— as soon as possible.
	The senior commander in the UK with responsibility for assessing risk and authorising the use of firearms in the UK will decide how to handle the operation. He will weigh up all the risks, including the safety of the public and the officers. That is his responsibility. Where the risks are low the UK would take over the surveillance at the earliest opportunity. But where the risks are perceived to be too high for all concerned—these are difficult judgments but they have to be made—the police will stop the suspect at port.
	In the Government's view that is a safer strategy than seeking to make it lawful for an authorisation to be given in a hurry by the Secretary of State or a chief officer of police to permit the foreign officers to bring in their firearms in the hope that they could use them safely to protect themselves and the public from a dangerous suspect. We are reinforced in that view because it is also the view of the National Crime Squad, which consulted ACPO on the issue. It was clear that they did not want foreign officers in the UK carrying firearms. That was not from a position of chauvinism but from trying to control the significant risks that follow. I do not need to go into detail on that. The House knows as well as I do of situations where the police have inadvertently shot an innocent member of the public because they thought there was a serious risk. Those are the most tragic of circumstances. Such judgments are terribly difficult to get right. Our police forces are not comfortable with this being the situation when they are not in a position to quality assure or quality control the training and regimes under which other people operate.
	How, then, do we deal with the issue? I shall come to that in a moment. As was also pointed out in Committee, these provisions relate to surveillance which will involve a situation where a person is being watched from a discreet distance, not where there is direct contact between the officer and subject.
	The situation would be the same for our own armed officers following suspects abroad. If the country to which they were travelling refused to let them carry their weapons, the commander of the UK operation would assess the situation and decide on the basis of the risks whether to arrest the suspect in this country or to allow the officers to proceed without their firearms or not to pursue. Those are the three options on which they would have to make a judgment.
	I accept that that might mean that some surveillance operations might be terminated that would otherwise have been able to continue. But, on balance, we are satisfied that that is the right approach and one which commands public confidence.
	As to whether we shall be allowed to maintain that policy by our Schengen partners, Article 40 allows participating states to prohibit the use of firearms by law enforcement officers from other states. We intend to take advantage of that. Our position will be clearly set out in the Schengen handbook. We consider that a blanket provision rather than a case-by-case consideration is permitted by the convention. That is because the officers conducting the observation must comply with the law of the contracting party. That is covered by Article 40.3(a). It is illegal for anyone, including overseas police officers, to bring a firearm into the United Kingdom, let alone to carry it loaded on their person without the appropriate authority from the Home Secretary, as I have stated.
	Furthermore, states that already participate in these provisions of the Schengen convention have made blanket decisions on the type of weapons that may be carried by officers entering their territory that are applied routinely in every case. We understand that Norway has taken a decision that it will permit the carriage of firearms only if they are authorised in advance, in effect ruling them out for the sort of urgent cases that we are discussing.
	I turn to the question also raised by the noble Baroness about undercover operations, which are different from covert surveillance. Covert surveillance is where a police officer is seeking to follow someone for the purpose of tracking where he is going because he is suspected of committing a serious offence. An undercover operation is when a police officer has infiltrated a criminal gang and is not known to be a police officer but is seeking to be inside that criminal gang, or a terrorist organisation, for the purpose of finding out what is happening and bringing people to justice.
	Article 40 of Schengen is not intended to apply to foreign officers who are undercover and have infiltrated a criminal gang. That is clear from the fact that Article 40 permits the state where the surveillance is to continue to take over the surveillance. Clearly, say, a French officer who has infiltrated a drugs gang could not be replaced by UK officers when he enters the UK. Similarly, many of the conditions in Article 40.3 of the Schengen convention which attach to surveillance simply could not apply to undercover work.
	The use of undercover officers in a foreign country is covered by international agreements, which are agreed by the international undercover working group and which set out the framework for operating an undercover officer in another country. The use of a UK undercover officer and vice versa is always agreed in advance with the host country and the laws of the relevant country are always followed. We have never authorised them to carry arms into the United Kingdom, nor vice versa. I stress that the Bill does not deal with undercover work but with covert surveillance.
	Finally, have there been discussions with other EU states on firearms? There were discussions when the UK agreed to sign up to the Schengen convention. Further discussions will take place on a law enforcement basis in the next few months when the Bill becomes law. I hope that I have put a substantial amount on the record and explained why we do not believe that this is a right approach to take to this sensitive issue.

Baroness Anelay of St Johns: My Lords, I am grateful to all noble Lords who took part in this debate on what the Minister rightly said is a sensitive issue.
	I have always made clear that we on these Benches are not in favour of foreign officers—Customs and police—carrying guns. However, we believed the debates needed to take place in order to tease out how the safety of both the public and the officers was to be maintained. Such safety must be paramount. I was intrigued by the Minister's explanation that persons coming here carrying out covert surveillance would be liable to prosecution if they carried guns into this country. My noble friend Lord Lucas raised the issue that this is not just a case of carrying guns into the country but that once here, a person might pick up a gun. Therefore, it is a matter of carrying guns wherever they come from.
	I was intrigued by the explanation given by the Minister that there would then be a discretion as to whether the person would be prosecuted. I understood him to say that it would be considered on a case-by-case basis and that a pragmatic approach would have to be taken as to whether prosecution would take place. I shall carefully read the Minister's words in Hansard. There is much to support him in making the point that there should be a pragmatic opportunity to decide whether someone will be prosecuted. However, one is then faced with the difficulty of a procedure that is opaque; it is not clear either to the public or to the police, here and overseas, whether or not someone could be prosecuted. Of course, we are always keen to try to put on the statute book legislation that has clarity regarding liability for prosecution and ultimate prosecution. One should not be open to an offence and then find that one is not prosecuted for some reason.
	That is a sensitive issue. I should like to look carefully at Hansard between now and Third Reading. I do not wish to bring the matter back as an amendment. I hope that that is helpful to the Minister. But we need to look closer at the matter. I do not know whether the Minister wishes to reply at this moment.

Lord Filkin: My Lords, I shall also look closely at what I said. I do not recollect—I certainly did not intend—giving the impression that there would be any circumstances in which foreign police officers coming into this country would be allowed or permitted to bring in their firearms. I hope I have set out our clear position: they will not be allowed to do so. We expect them to abide by, first, the laws of the land, and, secondly, the mutual co-operation that exists between police forces as regards these measures. The position would be absolutely clear because it would be set out in the Schengen handbook. It would define exactly what were the operational practices for foreign officer under covert surveillance, seeking to enter into the United Kingdom. They will not be allowed to bring in their guns.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister. I shall again look carefully at Hansard. I agree: I thought he made it clear that there should be no permission to bring guns into the country, but it looked as though the prosecution might not necessarily go ahead. We need to look at that specific issue.
	I thought it very helpful of the Minister to put on the record the definitions of undercover work and covert surveillance and to make clear the gulf between the two. That was an important addition that we did not have in Committee. I welcome his explanation of the fact that Article 40 is not intended to include undercover work. That saves many problems that we might have had on later amendments today. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees: My Lords, before calling Amendment No. 82, I have to inform your Lordships that if Amendment No. 82 is agreed to I cannot call Amendments Nos. 83 to 86.

Baroness Anelay of St Johns: moved Amendment No. 82:
	Page 56, leave out lines 1 to 3.

Baroness Anelay of St Johns: My Lords, in moving Amendment No. 82, I shall speak also to Amendments Nos. 85, 86, 89 and 95. I use this rather large and complex group of amendments to ask the Government to give some clear signposting to the public and their advisers regarding what a UK resident could do in order to get redress if he suffers damage as a result of an action by a police or customs officer who has come over to the UK in order to carry out covert surveillance.
	Since these are complicated matters, I have tried to put together as many amendments as possible so that the Government can try to give a full picture rather than my coming backwards and forwards on little parts. On Report, that is quite difficult. It is much better to put it all together. In that spirit, I—rather unusually for the Official Opposition and for me—gave the Home Office some advance warning of the kind of questions that I would ask. So I shall be slightly longer than normal on the matter. But it means, following what I am sure will be a full explanation by the Government, that I shall not have to press the matter today. One hopes that we will not need to return to it as it is a matter of explanation.
	Under subsection (5) of new Section 76A of the Regulation of Investigatory Powers Act 2000, the Government propose:
	"An officer is not to be subject to any civil liability in respect of any conduct of his which is incidental to any surveillance that is lawful by virtue of subsection (4)".
	Instead, under amendments to the Police Act 1997 contained in what is now Clause 84 of the Bill, the director general of NCIS is still liable, according to paragraph 163 of the Explanatory Notes,
	"to cover the cost of any damage foreign surveillance officers may commit, or legal action to which they may be subject".
	Amendments Nos. 82, 85, 86 and 95 seek an explanation from the Government of why different wording is used in these two provisions.
	Under Clause 82, the foreign officer is not to be subject to any civil liability in relation to conduct of his,
	"which is incidental to any surveillance",
	but, under Clause 84, the director general of NCIS will be liable for unlawful conduct on the part of the officer which takes place,
	"in the course of carrying out the surveillance".
	They are different words. I am sure that the Government have chosen their words carefully in relation to the provisions. We need them to explain more fully why they have chosen different words. Otherwise, the lawyers will certainly get at them whenever there are any claims in the future.
	What happens if a foreign officer does a tortious act which is "incidental" to the lawful surveillance but is not done "in the course of carrying out" the surveillance? Presumably, the Government think that such an act could happen because they have used two different terms. In such a case, the protection of new Section 75A(5) from civil liability for the foreign officer applies, so he is not liable and the director general of NCIS is not liable either. Is there, therefore, no remedy as neither the officer nor NCIS would be liable?
	On comparing the wording of the two provisions, my immediate thought was—perhaps an obvious one—that the foreign police or Customs officer carrying out the surveillance might drop a cup of hot coffee over an innocent bystander on a rest break while not watching the suspect. The drinking of the coffee might be "incidental" to the surveillance, but surely it is not done "in the course of carrying out" the surveillance itself if it is done while the officer is not watching the suspect.
	These are technical points. However, if the provisions were ever tested in the courts—and it is possible that they would be—no doubt the lawyers on one side would say that if no difference in meaning was intended by Parliament, it would have used exactly the same wording in each case. I hope the Minister will clarify that issue.
	Amendment No. 89 also covers issues of how individuals might obtain redress for damage but from a different viewpoint. It seeks to clarify the position of what happens if the surveillance takes place inside UK territorial waters but not on UK soil. I was grateful to the Minister for his earlier explanation about notification needing to take place only when the officers land on UK soil. What happens when someone carrying out covert—not undercover—surveillance is in UK territorial waters?
	I give an example. I shall be more athletic than I was last time. I am a windsurfer off Sandbanks near the entrance to Poole Harbour and I am acting appropriately. So I am not off course and I am behaving okay. I am hit by a small boat which is wholly under the control of the French or other overseas police or Customs officers who have entered UK territorial waters to continue surveillance on a suspect. It is covert surveillance, not undercover, and they are controlling the boat. They may or may not intend to land on UK soil.
	At this stage they have not made any decision about whether or not to notify the UK authorities of their intention to continue their hot surveillance on UK soil. They carry out surveillance from the boat. After all, electronic surveillance means that they can do that very well indeed. But the officers are either negligent or reckless about their control of the boat, which causes me damage. Can I sue? Whom do I sue, and how?
	Is there any difference if they are merely careless and not negligent or reckless? Is there any difference if they have decided to continue hot surveillance on UK soil and they have notified the UK authorities of that?
	These points are all the more important because it appears that the Government do not yet know how our EU partners will interpret the Schengen convention in this respect when our own officers go overseas. I hope that the Government will be able to clarify these matters further today. I beg to move.

Lord Renton: My Lords, although my noble friend Lady Anelay has said that her amendments are probing ones, she has raised one or two very important matters. I wish to refer to only one. In so doing, one must bear in mind that this clause, perhaps more than any other, is the result of the Schengen agreement. Amendment No. 82 seeks to leave out subsection (5). It states:
	"An officer is not to be subject to any civil liability",
	in these circumstances. That could be very hard on individuals who, free from any blame, happen to suffer as a result of legitimate action taken by the foreign police who have entered the country. It could cause great hardship. I am a little worried about the refusal to accept civil liability in these circumstances. The problem would not arise very often, but when it did it could cause great hardship to individuals. While agreeing with my noble friend in the very penetrating comments that she made, above all she is right to refer to Clause 82(5).

Lord Stoddart of Swindon: My Lords, the noble Baroness, Lady Anelay, has made a number of points and asked a number of questions. I shall be interested to hear the answers. In Grand Committee we had a debate about this matter. We were worried about what civil redress people might have who had been injured in some way. We were assured that redress would be achieved through the director-general. That is fair enough as far as it goes.
	I wish to raise one point, which is the conduct of the surveillance officers in this country. They should not be in a superior position to our own police. If there is a complaint against any of our own police that complaint goes to the Police Complaints Authority. The result of its findings may very well have a bearing on any claim which is made against the police.
	It seems to me that there is no provision for foreign officers conducting operations in this country to be investigated. Therefore, that not only puts them in a superior position to our own police officers, but it could also hurt the position of a complainant suing the director-general because of the activities of a foreign surveillance officer. That point should be addressed both from the point of view of the British police and of British civilians who may be injured during surveillance operations by a foreign policeman.

Lord Clinton-Davis: My Lords, my noble friend will tell me if I am right, but if a foreign officer misbehaves there is provision by virtue of a complaint being made to the police force affecting the individual. So far as I know, that miscreant is not above the law. I believe profoundly that it is possible for the complaint to be registered. I would like to know whether I am right or wrong about that.

Lord Lucas: My Lords, I share my noble friend's concerns in this area. As we have seen recently in South Africa, it is possible for even the best informed foreign intelligence services to get things completely wrong and to cause considerable damage to an innocent citizen. Some of the things done in the course of directed and intrusive surveillance are capable of causing extreme damage. If one sets a bug in another's computer in order to tap into what is being done, if things go wrong one is capable of messing up the entire computer system and possibly causing a great deal of damage. If the person subjected to the search is innocent, it is right that he or she should have redress.
	I hope that that matter is contained somewhere in the provisions of the Bill. I do not see it, having read the words I have been directed to by my noble friend. It is very important that a British citizen should be no worse off than he or she would be if it were a British constable making a mess of things than if it were a French constable doing so.
	If there is civil damage caused by acts which are lawful because they fall within the activities allowed by the Bill, and a computer system is destroyed or a surveillance device sets fire to something valuable and uninsured, it is reasonable that there should be redress for that. I cannot see how Clause 84 in any way offers that kind of protection because it offers protection only for unlawful acts.

Lord Filkin: My Lords, I am grateful to the noble Baroness, Lady Anelay, for the intelligent grouping of these amendments so that we can have one complex discussion rather than a sequence of them. I also offer my condolences to her on her recent accident. The response will take some time, but it is better that I make it now in the hope that that might save us time later on. I hope the House will bear with me.
	This is a complex area and it may be helpful if I initially explain why we need the provisions in Clause 82(5) and Clause 84 on civil liability for overseas officers and the different circumstances that they address. The purposes of these two clauses are very different. The provisions in Clause 82(5) are aimed at ensuring that civil liability does not arise in relation to the conduct of foreign officers conducting emergency surveillance for up to five hours where that conduct would be incidental to the surveillance. By this we mean conduct that is inextricably associated with the surveillance to the extent that it is effectively unavoidable if the surveillance, which would have to be lawful, is to continue.
	An example would be if the officers needed to follow a suspect into a supermarket car park. As they would not be shopping they would be technically committing trespass, but they would have to do that to continue the surveillance. I must stress absolutely that "incidental conduct" as defined by RIPA covers an extremely narrow set of circumstances. It would not cover any conduct that was not essential to continue the surveillance.
	Clause 84, by contrast, is intended to provide an avenue of redress for the victim of damage, other than damage arising from incidental conduct, caused during the emergency surveillance period. Clause 84 would apply, for example, where the foreign surveillance officer crashed a car into the perimeter wall of a factory thereby causing damage to the wall. That is a case of accidental damage. The victim of the damage would then need to know whom to approach for compensation. The clause provides that liability would fall on the director-general of the National Criminal Intelligence Service.
	There is clearly concern as to whether there is an avenue for redress for those affected by incidental conduct. Neither Clause 84 nor Clause 82(5), which also deals with civil liabilities, provides for liability to be carried by the director-general of NCIS, or indeed anyone else, in relation to conduct by foreign officers which is simply incidental to lawful surveillance. This is no different from the existing situation for domestic officers under the Regulation of Investigatory Powers Act 2000. To make special provision for incidental conduct in these circumstances would mean treating foreign officers differently from domestic officers, which would not make sense.
	But I do not believe that that should be a cause for concern. As I have explained before, incidental conduct covers an extremely narrow set of circumstances. It is difficult to imagine how it might give rise to a claim for damages. Any conduct that did give rise to a claim—for instance, the example given in Committee of an officer from France driving on the wrong side of the road and knocking someone down—would be classed as accidental not incidental. Under Clause 84, there would be an avenue of redress through the courts to the director-general of NCIS.
	In the unlikely event of damage occurring as a result of incidental conduct, it would be for the courts to determine whether particular conduct could be considered incidental, and, consequently, whether damages should be sought. We would expect the courts to take a narrow view of what might constitute incidental conduct.
	The key to Schengen cross-border surveillance arrangements is reciprocity. We need to provide foreign officers with the same protection as that afforded to UK officers undertaking domestic surveillance. Clause 84 provides for that. Article 43 of the Schengen convention sets out arrangements on civil liabilities so that we can expect reciprocal arrangements for our officers operating abroad in similar circumstances.
	I realise that Amendment No. 89 is intended to clarify situations in which damage arises when foreign officers are in a boat off the UK coast; but it would have the reverse effect. It would be unworkable in practice, so the Government cannot accept it. I noted during our discussions in Committee that it was hard for those crossing into the UK by sea to know exactly when they had entered UK waters. There are no visible markers. This amendment would simply add to the tasks of officers carrying out surveillance, who would be forced to spend time and energy trying to find out whether they were in UK waters.
	In the unlikely event that damage should arise in such a situation, it would be for the courts to decide where liability lay. The circumstances in which liability for purely incidental conduct might arise are extremely narrow. Damage to a passing windsurfer would not fall within the definition.
	We intend to interpret the Schengen convention requirements about the border in a way that protects the interests of the UK and is readily understood by everyone who would use the cross-border arrangements in the fight against crime. For that reason, we have indicated that we regard the border as having been crossed when the officers arrive at a port or airport. For those reasons, I do not think that the amendments would add clarity.
	I shall deal now with the senior wrangler questions that the noble Baroness, Lady Anelay, asked. The first related to the case of the windsurfer hit by the French officers' boat off Sandbanks. If the officers had not landed, their surveillance might not have been covered by new Section 76A, on the basis that they had not entered the UK. There would, therefore, be no question of the provisions on incidental liability in Section 76A(5) applying. In that case, the windsurfer would have to sue the French authorities. As the accident happened in Poole harbour, the case could be brought in the English courts. By contrast, if an English windsurfer had been hit by the French officers' boat off a beach in Normandy, the case would have to be brought in the French courts.
	However, when considering travel by such means, a court might take a different view on when an officer is deemed to have entered UK territory. It might say that being close to the UK coast constituted entering the UK. Accordingly, NCIS could be sued instead of the French authorities. In practice, as NCIS can reclaim any damages that it might have to pay to the windsurfer, it is unlikely that it would argue that technically it was not liable. It would not be in accordance with the spirit or intent of the legislation to do so. Rather, we would expect NCIS to handle the claim. In any event, if such a situation were deemed to come under new Section 76A, damage to a windsurfer would not count as incidental. It could not be argued that the surveillance officer had to damage the windsurfer to continue his surveillance. He would have had a choice, therefore the damage would be deemed accidental. The liability provisions of Clause 84 would thus apply.
	In summary, whether or not the foreign officers had entered the UK, it would be open to the windsurfer to pursue a claim for damages through the UK courts. The only question is whether the claim could be against only the French authority or whether he could sue NCIS instead. In practice, the prudent course for any solicitor would be to advise his client to sue both the French authority and the NCIS, and to let them and the court decide who would defend the claim. I emphasise that Clause 84 does not remove liability from the French officers; it merely makes NCIS liable as well, thus enabling British citizens to obtain easier and earlier redress.
	The noble Baroness asked whether there was any difference if the officers were merely careless, not negligent. Careless behaviour would not count as incidental. Incidental conduct, in the context of surveillance, means conduct necessary for the surveillance to continue. Carelessness, negligence and recklessness would all fall outside the definition. Obviously, the reason for the accident might affect liability. For example, if the windsurfer was at fault, neither NCIS nor the French authority would be liable.
	The noble Baroness also asked whether there would be any difference if the foreign officers had decided to continue covert surveillance on UK soil and had notified the UK authorities of their decision. In that case, they would fall within the automatic authorisation of new Section 76A, making the director-general of NCIS responsible for any civil liability claim. Careless or reckless behaviour would not count as incidental conduct.
	I think it was the noble Baroness who asked about the position where damage is caused on UK soil by an off-duty foreign officer. Clause 84 would allow the victim to pursue a claim for damages through the courts against the DG of NCIS, provided that at the time the foreign officer was conducting surveillance under Section 76A. If the foreign officer was off duty—for example, because the surveillance had finished and he was returning to France—any damage he caused would fall outside Clause 84. It would be a private matter between the civilian and the French authorities, just as it would be if the officer had been on holiday in the UK and had caused damage to a UK citizen's property or interests.
	A question was asked about the difference between Clauses 82 and 84, and the impact of that. The provisions in Clause 82 on incidental conduct are intended to enable foreign officers to do things that would otherwise be unlawful. They do so by making incidental conduct lawful—for example, certain trespass is deemed lawful. Clause 84 has no effect on the circumstances in which liability will or will not arise. It does not make lawful activities unlawful or otherwise unlawful activities lawful. It simply provides that, where a foreign officer could be sued for damages, NCIS can be sued instead. It is intended simply to make it easier for the claimant.
	Slopping coffee on a passer-by would not count as incidental conduct, as it would not have been necessary to continue the surveillance. It would be possible to lodge a claim under Clause 84.
	The noble Lord, Lord Stoddart, asked a good question about the Police Complaints Authority. Claimants will not be able to apply to the Police Complaints Authority, as it covers only domestic police officers. But it will be possible for them to complain to the independent tribunal established by RIPA, which can award damages. Any misbehaviour by foreign officers would be referred to their forces, which could jeopardise future operations. It would be for the officers' force to take other sanctions against them for misconduct in those circumstances.
	Anyone who thinks that this House does not carry out proper scrutiny should read the debate on these amendments. I hope that, when the noble Baroness, Lady Anelay, has had an opportunity to read my response, which is of almost prolix length, she will find it helpful. If not, I am sure that she will signal to me in one of the many ways open to her.

Baroness Anelay of St Johns: My Lords, I am grateful to the noble Lord. I do not believe that his response was prolix. All the matters dealt with needed to be clarified, simply because at some stage people will get hurt and will need to know how they may seek redress.
	It was particularly important that the noble Lord assisted the House by clarifying the distinction between "incidental" behaviour and "accidental" behaviour, which was unclear in Committee. In particular, I was struck by his further explanation of "incidental", tying it so narrowly to something that is inextricably bound up with the surveillance. He said that the actions would have had to be effectively unavoidable. The noble Lord also commented that he would expect the courts to take a narrow view. All those points focused our minds carefully on actions that he said would otherwise have been unlawful, but which the Bill will render lawful.
	I shall need to look carefully at the noble Lord's explanation between now and Third Reading to see whether other issues need to be drawn out. But he has given me the answers that I needed. I may not have asked all the right questions; I do not fault his answers.
	I was intrigued by the noble Lord's treatment of the position where someone is carrying out covert surveillance while in territorial waters. I will look carefully at his comments, which were particularly helpful. He commented that it was difficult to know when one was in territorial waters, because there are no visible markers. He is right; there is no marker bobbing up and down to signal entry to the UK. But anyone carrying out proper navigation will have charts. As the noble Lord is aware, statutory instruments lay down carefully territorial boundaries—otherwise my noble friends from Scotland might have a few words to say about Scottish oil, and who might take it. The noble Lord probably has gone as far as possible in clarifying these matters, but I need to check that I have not missed anything, and I shall take care of that.
	With the assistance of my noble friends we have had some good debates on the amendments to Clause 82. I said that they were all intended to be probing amendments. It may be helpful to the House if I state at this stage that it will not be appropriate for me to move Amendment No. 93, which seeks to insert a requirement for a rather different kind of annual report. I wish to reflect carefully on the Minister's answers in regard to the amendments to Clause 82 before I consider whether it will be necessary to continue with Amendment No. 93, in its current or an amended form. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Filkin: moved Amendment No. 83:
	Page 56, line 1, leave out "An" and insert "The"
	On Question, amendment agreed to.
	[Amendments Nos. 84 to 86 not moved.]

Lord Filkin: moved Amendment No. 87:
	Page 56, line 3, at end insert—
	"(5A) The condition in this subsection is satisfied if, immediately after the officer enters the United Kingdom—
	(a) he notifies a person designated by the Director General of the National Criminal Intelligence Service of that fact; and
	(b) (if the officer has not done so before) he requests an application to be made for an authorisation under Part 2, or the Regulation of Investigatory Powers (Scotland) Act 2000, for the carrying out of the surveillance."
	On Question, amendment agreed to.
	[Amendments Nos. 88 to 90 not moved.]

Lord Filkin: moved Amendments Nos. 91 and 92:
	Page 56, leave out lines 21 to 25.
	Page 56, line 27, at end insert—
	""United Kingdom officer" means—
	(a) a member of a police force;
	(b) a member of the National Criminal Intelligence Service;
	(c) a member of the National Crime Squad or of the Scottish Crime Squad (within the meaning of the Regulation of Investigatory Powers (Scotland) Act 2000);
	(d) a customs officer"
	On Question, amendments agreed to.
	[Amendment No. 93 not moved.]
	Clause 83 [Assaults on foreign officers]:

Baroness Anelay of St Johns: moved Amendment No. 94:
	Page 56, line 38, at end insert—
	"(4) When sentencing a person for an offence of violence not listed in subsections (1) to (3) that is committed against a person carrying out surveillance in the United Kingdom under the inserted section 76A of the Regulation of Investigatory Powers Act 2000 (c. 23), the court shall treat the person carrying out the surveillance as if he were acting as a constable in the execution of his duty."

Baroness Anelay of St Johns: My Lords, the amendment relates to the imposition of penalties on persons who are convicted of assaulting foreign police or Customs officers who are carrying out covert surveillance under the provisions of new Section 76A of the Regulation of Investigatory Powers Act 2000 as inserted by Clause 82 of the Bill.
	Clause 83 provides that, for the purposes of the summary offence of assaulting a constable in England and Wales, in Scotland and in Northern Ireland, a foreign police or Customs officer who is carrying out the hot surveillance is to be treated as if he were acting as a constable in the execution of his duty. That means that a person who committed such an assault on a foreign officer could be charged with the offence of assaulting a constable under the law of the relevant part of the United Kingdom. While, certainly in England and Wales, the offence of assaulting a constable carries the same maximum penalty as common assault—namely, six months' imprisonment—it is more likely to attract a custodial sentence than common assault because of the way that it is dealt with in the Magistrates' Association guidelines for sentencing.
	In Grand Committee, I asked the Government about the absence of any reference to other, more serious, offences of violence which might be charged where an assault was committed against a foreign officer. For example, if someone were simply to punch a foreign officer, causing no injury, it is likely that he or she will be charged with the offence of assaulting a constable under the Police Act 1996—which, of course, carries a maximum sentence of six months. But, if the person causes serious injury to the foreign officer, or attacks him with a weapon causing such injury, then it is likely that he or she will be charged with a more serious offence under Sections 18, 20 and 47 of the Offences Against the Person Act 1861—that is to say, wounding or causing grievous bodily harm with intent, the basic offence of wounding or inflicting grievous bodily harm or the offence of assault occasioning bodily harm. Do the Government intend that those who assault foreign police officers who are conducting hot surveillance should be dealt with as if they had assaulted a UK police officer when they are charged with those more serious offences as well as when they commit minor assaults?
	I recognise that there is no separate offence of assault occasioning actual bodily harm to a police officer or of wounding a police officer under the Offences Against the Person Act 1861, and that the fact that a police officer had been assaulted will instead be taken into account as an aggravating factor by the sentencing court. But, as I read the Bill, the Government are saying that those who commit minor assaults on foreign officers acting under the provisions inserted by Clause 82 are to be charged with assault on a constable, which carries a much greater risk of custody than common assault, but they are not making any corresponding provision in relation to the aggravating factors which should be taken into account when sentencing takes place for a more serious offence of violence with which such persons may be charged.
	The amendment seeks to provide that, in cases where a foreign police or Customs officer was assaulted and his or her assailant was charged with one of the more serious offences of violence not referred to in Clause 83, the assailant would be treated by the court as if he or she had assaulted a UK police officer.
	That is what the Government appear to intend should happen. In his letter to me dated 18th February, the noble Lord, Lord Filkin, stated:
	"We would not expect such offences to be regarded as being any different from offences involving UK officers conducting surveillance. Article 42 of Schengen states that officers conducting surveillance under Article 40 on the territory of another Member State shall be treated as officers of that Member State in respect of offences committed by or against them".
	That is fine—I agree with those sentiments—but, as far as I can see, there is nothing to that effect on the face of the Bill, other than what is presently in Clause 83, which refers only to the summary offence of assault.
	I am seeking to give the Government an opportunity to set out their position in response to the points that I have made, and to ensure that people who carry out serious assaults on foreign police or Customs officers are appropriately dealt with. I beg to move.

Lord Renton: My Lords, it is an interesting amendment. Having had a lot of judicial experience in criminal cases as a relief judge at the Old Bailey, as a recorder and in other ways, I am a little doubtful about requiring a court to consider a particular matter, because it may cause it to disregard other relevant matters. I hope that I am not being obstinate or difficult in saying that.
	I am afraid that there needs to be one small drafting amendment. If the court is to treat the person carrying out the surveillance as if he were "acting as a constable", the question arises of whether a constable would have acted differently from a sergeant or an inspector. Therefore, if I may say so with deep respect to my noble friend, the word "constable" should be replaced by the words "police officer".

Lord Filkin: My Lords, these issues were raised initially in Grand Committee. I undertook to consider them further, and I wrote to the noble Baroness, Lady Anelay, on 18th February. I explained that we would not expect such offences to be regarded as being any different from offences involving UK officers conducting surveillance. In other words, as I will amplify, we expect that foreign officers conducting authorised covert surveillance in the circumstances we are talking about will have exactly the same status and defence in law as a UK officer.
	Article 42 of Schengen states that officers conducting surveillance under Article 40 on the territory of another member state shall be treated as officers of that member state in respect of offences committed by or against them. The thrust of what the noble Baroness, Lady Anelay, is saying is "and so they should be".
	Let me explain why we believe that to be the case. Clause 83 provides that the special protection from assaults given to constables under the Police Act 1996 shall be extended to foreign officers conducting surveillance under these clauses. However, UK statute does not give constables special protection for more serious assaults. Rather, statute treats them in the same way as members of the public, albeit the fact that the victim is a constable may be taken into account by trial judges on sentencing. Accordingly, to ensure that we are four-square with UK provision, the Bill makes no further provision for foreign officers, nor is it right to do so. A sentencing discretion is a matter for the courts to decide in each case.
	Therefore, in the unlikely event of a serious attack on a foreign officer, the offence will be treated in the same way as an assault on a UK officer. For example, the attacker could be charged with actual bodily harm or grievous bodily harm and it would be for the judge to decide the sentence and whether to take into account that the victim was a foreign officer conducting surveillance under new Section 76A.
	The further advantage of Article 42 of the Schengen convention is that if a UK officer carrying out surveillance abroad is assaulted, he could expect to have the same protection in law as an officer of the country in which he was operating at the time of the assault. Therefore, Clause 83 already meets the purpose of the amendment to ensure that there is proper protection for officers carrying out this work, although we expect cases of confrontation to be extremely rare given the nature of covert surveillance work.
	In response to the issue raised by the noble Lord, Lord Renton, Section 89 of the Police Act 1996 uses the term "assaults on constables". It states:
	"Any person who assaults a constable in the execution of his duty, or a person assisting a constable in the execution of his duty, shall be guilty of an offence".
	The term is used in the Act and I therefore expect it to be a generic term that covers all police officers. If I am wrong on that conjecture, I shall write to the noble Lord accordingly.
	For those reasons, I hope that I have explained both how the measures in Clause 83 implement the Schengen convention and also ensure that there is no distinction between foreign officers and UK police officers in these respects.

Lord Renton: My Lords, before the noble Lord sits down, I am grateful to him for pointing out the previous example of the use of "constable". However, that was in rather different circumstances, was it not, from those which could arise under the Bill?

Lord Filkin: My Lords, it would be best if I reflect on that and respond in a more detailed note.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister for reassurance that foreign police/Customs officers, who may be subject to serious assault, would be in a no worse position than our own police/Customs officers. Of course, we hope that none would be subject to assault but, considering the dangerous operations in which they are likely to be involved, it is a possibility. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 84 [Liability in respect of foreign officers]:
	[Amendment No. 95 not moved.]
	Schedule 4 [Terrorist property: freezing orders]:

Lord Bassam of Brighton: moved Amendment No. 96:
	Page 66, line 12, after "11A" insert "25A, 41A"

Lord Bassam of Brighton: My Lords, this group of amendments makes provision for Scotland and Northern Ireland for the freezing of terrorist assets. The provisions are comparable to those made by the Bill for England and Wales. Any differences for Scotland reflect the different Scottish legal system, but the overall effect will be the same as for England, Wales and Northern Ireland. The other amendments are technical amendments, necessary to ensure the full application of the provisions to Scotland and Northern Ireland.
	Amendment No. 96 provides for Section 123(2)(i) of the Terrorism Act to refer to the Scottish and Northern Irish provisions, as well as to those in England and Wales. Amendment No. 97 will amend paragraph 3 of Schedule 4 to the Bill in order to clarify that the changes that that paragraph introduces will apply only to England and Wales.
	Finally, Amendment No. 109 ensures that the insolvency provisions in paragraphs 45 to 53 of Schedule 4 to the Terrorism Act will apply also to the Scottish and Northern Irish provisions, as well as to those in England and Wales. Amendment No. 109 achieves that. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 97:
	Page 66, line 13, leave out from "In" to ", after" and insert "Part 1 of Schedule 4 (forfeiture orders: England and Wales)"
	On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 98:
	Page 66, line 27, leave out "11D(3)" and insert "11D"

Lord Bassam of Brighton: My Lords, this is a new group. Amendments Nos. 98, 100 and 101 will make it easier for the Secretary of State to ensure that overseas freezing orders can be enforced under the schedule only if they relate to the proceeds or the instrumentalities of terrorism.
	Currently, paragraph 11D(2) requires property to be "terrorist property" as defined by Section 14 of the Terrorism Act before it can be frozen by an overseas freezing order. In most cases, that will mean that the Secretary of State will have to decide whether the property is likely to be used for the purposes of terrorism under Section 14(1)(a) of the Terrorism Act.
	On reflection, the Government believe that this could put the Secretary of State into a difficult position. Depending on how the issuing state has transposed the framework decision, its court might have to be satisfied only that there is a good, arguable case that the property to be frozen is likely to be used for the purposes of terrorism. However, the Secretary of State must be satisfied that the property was likely to be used for the purposes of terrorism. That could mean that the Secretary of State could have to apply a stricter test, even though he is likely to have less information available to him than the court in the requesting state.
	Having given this matter serious consideration and particularly in the light of the helpful debate stimulated by the noble Lord, Lord Goodhart, in Grand Committee, it appeared that a different approach would be better. These amendments provide that, for an order to be an overseas freezing order, it must have been made by an overseas court on the grounds that the court considers, first, that the frozen property is likely—within the meaning of the framework decision—to be used for the purpose of a listed offence; and, secondly, that the action constituting the offence would be an act of terrorism as defined in the Terrorism Act.
	It is for each state to interpret "considers" in its own implementing legislation. Our amendments will leave it to the overseas court to decide what it considers the property to be, using whatever definition of that word the issuing state has decided to adopt. The Secretary of State will still have to decide whether the act constituting the listed offence would amount to terrorism, as defined by our law. However, he should be able to do this quite easily on the basis of the certificate, which will give the nature and legal classification of the relevant offence. These amendments will make the process of identifying an overseas freezing order simpler and less contentious.
	Turning to the final two amendments, Amendment No. 106 clarifies the circumstances in which the High Court can postpone giving effect to an overseas order. Paragraph 11F(b) of Schedule 4 to the Bill is designed to cover cases where the assets have already been frozen by another court. Our intention is that the court will be able to postpone execution if the assets are subject to a restraint order under Section 41 of the Proceeds of Crime Act 2002.
	The current text of paragraph 11F(b) reflects Clause 23(1)(b) and allows postponement where, due to another court order in criminal proceedings, the property may not be removed from the United Kingdom. While an order under Section 41 of the 2002 Act will prevent assets being removed from the United Kingdom, we do not consider that this is the best wording to use in the context of the freezing of terrorist assets. While evidence will be frozen under Chapter 2 of Part 1 of the Bill with a view to it being sent abroad, assets will be frozen under Schedule 4 with a view to their confiscation in the United Kingdom. Therefore, sending them abroad is not really the issue.
	A restraint order under Section 41 of the Proceeds of Crime Act prevents the restrained property being "dealt with". The amendment reflects that wording, replacing the reference to the assets being removed from the United Kingdom with a simple reference to an order preventing them from being "dealt with". We formed the view that this is a better way of expressing our intention.
	Amendment No. 107 proposes a minor change to paragraph 11G(4), which contains the grounds on which the court will be able to cancel registration of an overseas order. The addition of,
	"or to the extent that",
	to paragraph 11G(4) will give the court the flexibility partially to revoke an order. That would be necessary if, for example, the overseas court were to unfreeze part of the defendant's assets.
	I believe that that lengthy explanation explains the technicalities involved. I beg to move.

Lord Goodhart: My Lords, I welcome Amendment No. 100. It is an improvement on the formulation of the test for overseas freezing orders contained in the amendments agreed in Grand Committee.

On Question, amendment agreed to.

Lord Goodhart: moved Amendment No. 99:
	Page 67, line 16, leave out "that there is a good arguable case"

Lord Goodhart: My Lords, this is an amendment to Schedule 4, the new schedule introduced by the government amendment in Grand Committee. It introduces new provisions in Schedule 4 to the Terrorism Act 2000. They provide for the making of freezing orders relating to certain property which may be terrorist property.
	Paragraph 11B of Schedule 4 to the 2000 Act contains provisions in relation to England and Wales for a domestic freezing order; that is, an order made by the English court to freeze property in a participating country. Similar provisions have been put forward for Scotland and Northern Ireland in Amendment No. 108, which has been spoken to but not yet agreed.
	The procedure involves the making of a certificate by the High Court. It may make a certificate under paragraph 11B(2) of Schedule 4 if,
	"it is satisfied that there is a good arguable case that the property is likely to be used for the purposes of a listed offence".
	As we know, a "listed offence" means a terrorist offence. Paragraph 11D covers overseas freezing orders; that is, an order made by the court in a participating country in relation to property in the United Kingdom. Paragraph 11D(3)—it is about to be amended in Amendment No. 100—makes it a condition of the overseas freezing order that it has been made because the appropriate authority considers that,
	"the property is likely to be used for the purposes of a listed offence".
	Here, that is a terrorist offence.
	It is apparent that the tests for a domestic and an overseas freezing order differ. The test for the domestic freezing order is that there is a good arguable case that the property is likely to be used for a terrorist offence. No lawyer would regard the court believing that there is a good arguable case that the property is likely to be used for a terrorist offence as having the same meaning as the court considering that the property is likely to be used for a terrorist offence.
	The test for the overseas freezing order is therefore more strict. It is not enough to show,
	"that there is a good arguable case",
	but that the court considers that,
	"the property is likely to be used"
	for terrorist purposes. I therefore believe that the tests for domestic and overseas freezing orders are significantly different. That is curious and needs an explanation.
	The difference is more important than that, however. The amendment to Schedule 4 to the Terrorism Act 2000 is intended to give partial effect to the EU framework decision of 2002 on orders freezing property or evidence. That framework decision provides for the mutual recognition of freezing orders if they satisfy certain tests.
	To paraphrase Article 2 of the framework decision, one of the grounds on which a domestic or overseas freezing order can be made is that the property to be frozen is property which the competent judicial authority in the issuing state—which would be the UK in the case of a domestic freezing order and a participating country in the case of an overseas freezing order—considers to be a means of an "instrumentality"; the means of carrying out a terrorist offence. The framework decision appears to require the test to be the same both ways.
	The test is now directly in line with the formula that is used as a result of the recent amendment for overseas freezing orders. That is plainly a stronger test than that there should be a good arguable case, and the real danger is that if the test for a domestic freezing order is weaker than the test in the framework decision, courts in other participating countries may refuse to enforce domestic freezing orders on the grounds that they may be made in circumstances going beyond those covered by the framework decision and that those decisions are therefore not appropriate for mutual recognition.
	That would be a legitimate conclusion for a foreign court to reach and in those circumstances the results would clearly be thoroughly undesirable and contrary to the intention of the framework decision. In my view, the formula which has been adopted by Amendments Nos. 100 and 108 for overseas freezing orders should be applied in the same language to domestic freezing orders. I beg to move.

Lord Bassam of Brighton: My Lords, this is an interesting amendment, and I am grateful to the noble Lord for tabling it. We have had the debate in part previously. The noble Lord has explained the issue as clearly as he can, although it is complicated. The amendment would require the court to be satisfied that the property to be frozen was likely to be used for the purposes of a listed offence before it would be able to sign a certificate allowing a freezing order to be transmitted abroad. On the current drafting, the court must only be "satisfied" that there is a good arguable case that the property will be so used, which is a slightly lower balance of proof.
	The noble Lord, in proposing the amendment, has argued that it will result in a more accurate transposition of the requirement in Article 2(d) of the framework decision that the issuing court "considers" the property in question to be the proceeds or "instrumentalities" of an offence.
	We need to interpret "considers" in the context of the framework decision that is intended to allow freezing orders to be made and transmitted at a relatively early stage of the judicial process. Many EU states, including the UK, freeze assets from the start of a terrorist investigation, and the intention is that these orders should be able to be transmitted abroad.
	However, at this early stage of the investigation, it is unlikely that the court will ever have sufficient information of value to be able to say absolutely that the assets are likely to be used for an offence. That is why the test for making a freezing order in this country allows an order to be made at the beginning of an investigation or proceedings provided it appears to the court that the frozen property may be forfeited later in the proceedings.
	If "considers" is construed as requiring a "likely" test, this could limit the framework decision to freezing assets at what we would see as a late stage of the judicial process at which forfeiture orders are made. That is because this is the only stage at which such a standard of proof is likely to be met—where all the evidence has perhaps been gathered and all the required information is in place. Such a restriction would detract considerably from the effectiveness of the instrument. I am confident that the noble Lord would not want to do that.
	The Government believe, in this context, that the requirement that there be a "good arguable case" that the property in question is likely to be used for a listed offence is a legitimate interpretation of the word "considers". It will allow the framework decision to have its intended effect. This amendment would make it much harder to send freezing orders out of the UK to be enforced, and for that reason we must resist it.

Lord Goodhart: My Lords, I find the noble Lord's answer somewhat peculiar. The framework decision plainly uses the word "considers". Therefore, what the noble Lord appears to be saying is that the domestic freezing order—in order to move matters on quickly—will be made in a way that is not authorised by the framework decision, because the court has not got so far as being able to consider whether it is or is not likely that the property will be used for terrorist purposes.
	It also means—I have made this point previously but it has not been answered—that the Terrorism Act 2000, as amended by the Bill, will authorise the making of domestic freezing orders on a standard of evidence that is lower than the standard that the Government appear to require for overseas freezing orders. I find both those aspects very strange.
	Having considered the position, I now think that what is required is not a provision in the terms of Amendment No. 99, but one which, instead of using the word "satisfied", uses the word "considers"—which would bring the test for domestic freezing orders entirely into line with those for overseas freezing orders.
	In the circumstances, I shall not press the amendment. However, I am strongly inclined to come back at Third Reading with a variation on this proposal which would bring the tests for the two different freezing orders into line with each other. I hope that the Government will use the interval to consider the matter. It seems to me that the arguments in favour of bringing the two tests into line are overwhelming. In the light of the government amendments, I believe that the tests for the overseas freezing order are now correct. The same provision should apply to domestic freezing orders. For the reasons I have expressed, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton: moved Amendments Nos. 100 and 101:
	Page 68, line 16, leave out from "Kingdom" to end of line 21 and insert—
	"(b) which the appropriate court or authority considers is likely to be used for the purposes of a listed offence or is the proceeds of the commission of such an offence, and
	(c) in respect of which an order has been or may be made by a court exercising criminal jurisdiction in the participating country for the forfeiture of the property,"
	Page 68, leave out lines 24 to 28 and insert—
	"(3) The action which the appropriate court or authority considered would constitute or, as the case may be, constituted the listed offence is action done as an act of terrorism or for the purposes of terrorism."
	On Question, amendments agreed to.

Lord Bassam of Brighton: moved Amendment No. 102:
	Page 69, leave out lines 14 to 19 and insert "send a copy of the overseas freezing order to the High Court and to the Director of Public Prosecutions."

Lord Bassam of Brighton: My Lords, these amendments will require incoming freezing orders to be dealt with in the High Court, and not, as the schedule currently provides, in any "nominated court". We indicated in Grand Committee that we would bring these amendments forward. I am sure that they will find favour universally in this House.
	It is our desire that incoming orders should be dealt with in the High Court, as that body is currently responsible for issuing freezing orders under Schedule 4 to the Terrorism Act and is the only body that will be able to certify a freezing order for transmission abroad under paragraph 11B. These amendments are being introduced to fulfil and satisfy the wishes of your Lordships and to ensure consistency. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 103 to 109:
	Page 69, line 20, leave out "nominated"
	Page 69, line 22, leave out "nominated"
	Page 69, line 28, leave out "nominated court" and insert "High Court"
	Page 69, line 33, leave out from "be" to end of line 34 and insert "dealt with"
	Page 70, line 2, at end insert "or to the extent that"
	Page 70, line 17, at end insert—
	"In Part 2 of that Schedule (forfeiture orders: Scotland) after paragraph 25 there is inserted—
	"Domestic and overseas freezing orders
	25A (1) This paragraph has effect for the purposes of paragraphs 25B to 25G.
	(2) The relevant Framework Decision means any Framework Decision of the Council of the European Union which is identified by the Secretary of State by order and is about the execution of orders freezing property or evidence.
	(3) A listed offence means—
	(a) an offence described in a prescribed provision of the relevant Framework Decision, or
	(b) a prescribed offence or an offence of a prescribed description.
	(4) An order under sub-paragraph (3)(b) which, for the purposes of paragraph 25D, prescribes an offence or a description of offences may require that the conduct which constitutes the offence or offences would, if it occurred in a part of the United Kingdom, constitute an offence in that part.
	(5) Specified information, in relation to a certificate under paragraph 25B or 25D, means—
	(a) any information required to be given by a prescribed document annexed to the relevant Framework Decision, or
	(b) any prescribed information.
	(6) In this paragraph, "prescribed" means prescribed by an order made by the Secretary of State.
	(7) A participating country means—
	(a) a country other than the United Kingdom which is a member State on a day appointed for the commencement of Schedule 4 to the Crime (International Co-operation) Act 2003, and
	(b) any other member State designated by an order made by the Secretary of State.
	(8) "Country" includes territory.
	(9) Section 14(2)(a) applies for the purposes of determining what are the proceeds of the commission of an offence.
	Domestic freezing orders: certification
	25B (1) If any of the property to which an application for a restraint order relates is property in a participating country, the applicant may ask the Court of Session to make a certificate under this paragraph.
	(2) The Court of Session may make a certificate under this paragraph if—
	(a) it makes a restraint order in relation to property in the participating country, and
	(b) it is satisfied that there is a good arguable case that the property is likely to be used for the purposes of a listed offence or is the proceeds of the commission of a listed offence.
	(3) A certificate under this paragraph is a certificate which—
	(a) is made for the purposes of the relevant Framework Decision, and
	(b) gives the specified information.
	(4) If the Court of Session makes a certificate under this paragraph—
	(a) the restraint order must provide for notice of the certificate to be given to the person affected by it, and
	(b) paragraph 19(2) to (4) applies to the certificate as it applies to the restraint order.
	Sending domestic freezing orders
	25C (1) If a certificate is made under paragraph 25B, the restraint order and the certificate are to be sent to the Lord Advocate for forwarding to—
	(a) a court exercising jurisdiction in the place where the property is situated, or
	(b) any authority recognised by the government of the participating country as the appropriate authority for receiving orders of that kind.
	(2) The restraint order and the certificate must be accompanied by a forfeiture order, unless the certificate indicates when the court expects a forfeiture order to be sent.
	(3) The certificate must include a translation of it into an appropriate language of the participating country (if that language is not English).
	(4) The certificate must be signed by or on behalf of the court and must include a statement as to the accuracy of the information given in it.
	The signature may be an electronic signature.
	(5) If the restraint order and the certificate are not accompanied by a forfeiture order, but a forfeiture order is subsequently made, it is to be sent to the Lord Advocate for forwarding as mentioned in sub-paragraph (1).
	Overseas freezing orders
	25D (1) Paragraph 25E applies where an overseas freezing order made by an appropriate court or authority in a participating country is received by the Secretary of State from the court or authority which made or confirmed the order.
	(2) An overseas freezing order is an order prohibiting dealing with property—
	(a) which is in the United Kingdom,
	(b) which the appropriate court or authority considers is likely to be used for the purposes of a listed offence or is the proceeds of the commission of such an offence, and
	(c) in respect of which an order has been or may be made by a court exercising criminal jurisdiction in the participating country for the forfeiture of the property,
	and in respect of which the following requirements of this paragraph are met.
	(3) The action which the appropriate court or authority considered would constitute or, as the case may be, constituted the listed offence is action done as an act of terrorism or for the purposes of terrorism.
	(4) The order must relate to—
	(a) criminal proceedings instituted in the participating country, or
	(b) a criminal investigation being carried on there.
	(5) The order must be accompanied by a certificate which gives the specified information; but a certificate may be treated as giving any specified information which is not given in it if the Secretary of State has the information in question.
	(6) The certificate must—
	(a) be signed by or on behalf of the court or authority which made or confirmed the order,
	(b) include a statement as to the accuracy of the information given in it,
	(c) if it is not in English, include a translation of it into English.
	The signature may be an electronic signature.
	(7) The order must be accompanied by an order made by a court exercising criminal jurisdiction in that country for the forfeiture of the property, unless the certificate indicates when such an order is expected to be sent.
	(8) An appropriate court or authority in a participating country in relation to an overseas freezing order is—
	(a) a court exercising criminal jurisdiction in the country,
	(b) a prosecuting authority in the country,
	(c) any other authority in the country which appears to the Secretary of State to have the function of making such orders.
	(9) References in paragraphs 25E to 25G to an overseas freezing order include its accompanying certificate.
	Enforcement of overseas freezing orders
	25E (1) Where this paragraph applies the Secretary of State must send a copy of the overseas freezing order to the Court of Session and to the Lord Advocate.
	(2) The court is to consider the overseas freezing order on its own initiative within a period prescribed by rules of court.
	(3) Before giving effect to the overseas freezing order, the court must give the Lord Advocate an opportunity to be heard.
	(4) The court may decide not to give effect to the overseas freezing order only if, in its opinion, giving effect to it would be incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998).
	25F The Court of Session may postpone giving effect to an overseas freezing order in respect of any property—
	(a) in order to avoid prejudicing a criminal investigation which is taking place in the United Kingdom, or
	(b) if, under an order made by a court in criminal proceedings in the United Kingdom, the property may not be dealt with.
	25G (1) Where the Court of Session decides to give effect to an overseas freezing order, the Deputy Principal Clerk of Session must—
	(a) register the order in the Books of Council and Session,
	(b) provide for notice of the registration to be given to any person affected by it.
	(2) For the purpose of enforcing an overseas freezing order registered in the Books of Council and Session, the order is to have effect as if it were an order made by the Court of Session.
	(3) Paragraphs 20 and 21 apply to an overseas freezing order registered in the Books of Council and Session as they apply to a restraint order under paragraph 18.
	(4) The Court of Session may cancel the registration of the order, or vary the property to which the order applies, on an application by the Lord Advocate or any other person affected by it, if or to the extent that—
	(a) the court is of the opinion mentioned in paragraph 25E(4), or
	(b) the court is of the opinion that the order has ceased to have effect in the participating country.
	(5) Her Majesty may by Order in Council make further provision for the enforcement in Scotland of registered overseas freezing orders.
	(6) An Order in Council under this paragraph—
	(a) may make different provision for different cases,
	(b) is not to be made unless a draft of it has been laid before and approved by resolution of each House of Parliament."
	In paragraph 28 of that Schedule (enforcement of orders made in designated countries), in sub-paragraph (2), after the second "order" there is inserted "(other than an overseas freezing order within the meaning of paragraph 25D)".
	In Part 3 of that Schedule (forfeiture orders: Northern Ireland) after paragraph 41 there is inserted—
	"Domestic and overseas freezing orders
	41A (1) This paragraph has effect for the purposes of paragraphs 41B to 41G.
	(2) The relevant Framework Decision means any Framework Decision of the Council of the European Union which is identified by the Secretary of State by order and is about the execution of orders freezing property or evidence.
	(3) A listed offence means—
	(a) an offence described in a prescribed provision of the relevant Framework Decision, or
	(b) a prescribed offence or an offence of a prescribed description.
	(4) An order under sub-paragraph (3)(b) which, for the purposes of paragraph 41D, prescribes an offence or a description of offences may require that the conduct which constitutes the offence or offences would, if it occurred in a part of the United Kingdom, constitute an offence in that part.
	(5) Specified information, in relation to a certificate under paragraph 41B or 41D, means—
	(a) any information required to be given by a prescribed document annexed to the relevant Framework Decision, or
	(b) any prescribed information.
	(6) In this paragraph, "prescribed" means prescribed by an order made by the Secretary of State.
	(7) A participating country means—
	(a) a country other than the United Kingdom which is a member State on a day appointed for the commencement of Schedule 4 to the Crime (International Co-operation) Act 2003, and
	(b) any other member State designated by an order made by the Secretary of State.
	(8) "Country" includes territory.
	(9) Section 14(2)(a) applies for the purposes of determining what are the proceeds of the commission of an offence.
	Domestic freezing orders: certification
	41B (1) If any of the property to which an application for a restraint order relates is property in a participating country, the applicant may ask the High Court to make a certificate under this paragraph.
	(2) The High Court may make a certificate under this paragraph if—
	(a) it makes a restraint order in relation to property in the participating country, and
	(b) it is satisfied that there is a good arguable case that the property is likely to be used for the purposes of a listed offence or is the proceeds of the commission of a listed offence.
	(3) A certificate under this paragraph is a certificate which—
	(a) is made for the purposes of the relevant Framework Decision, and
	(b) gives the specified information.
	(4) If the High Court makes a certificate under this paragraph—
	(a) the restraint order must provide for notice of the certificate to be given to the person affected by it, and
	(b) paragraph 34(2) to (4) applies to the certificate as it apples to the restraint order.
	Sending domestic freezing orders
	41C (1) If a certificate is made under paragraph 41B, the restraint order and the certificate are to be sent to the Secretary of State for forwarding to—
	(a) a court exercising jurisdiction in the place where the property is situated, or
	(b) any authority recognised by the government of the participating country as the appropriate authority for receiving orders of that kind.
	(2) The restraint order and the certificate must be accompanied by a forfeiture order, unless the certificate indicates when the court expects a forfeiture order to be sent.
	(3) The certificate must include a translation of it into an appropriate language of the participating country (if that language is not English).
	(4) The certificate must be signed by or on behalf of the court and must include a statement as to the accuracy of the information given in it.
	The signature may be an electronic signature.
	(5) If the restraint order and the certificate are not accompanied by a forfeiture order, but a forfeiture order is subsequently made, it is to be sent to the Secretary of State for forwarding as mentioned in sub-paragraph (1).
	Overseas freezing orders
	41D (1) Paragraph 41E applies where an overseas freezing order made by an appropriate court or authority in a participating country is received by the Secretary of State from the court or authority which made or confirmed the order.
	(2) An overseas freezing order is an order prohibiting dealing with property—
	(a) which is in the United Kingdom,
	(b) which the appropriate court or authority considers is likely to be used for the purposes of a listed offence or is the proceeds of the commission of such an offence, and
	(c) in respect of which an order has been or may be made by a court exercising criminal jurisdiction in the participating country for the forfeiture of the property,
	and in respect of which the following requirements of this paragraph are met.
	(3) The action which the appropriate court or authority considered would constitute or, as the case may be, constituted the listed offence is action done as an act of terrorism or for the purposes of terrorism.
	(4) The order must relate to—
	(a) criminal proceedings instituted in the participating country, or
	(b) a criminal investigation being carried on there.
	(5) The order must be accompanied by a certificate which gives the specified information; but a certificate may be treated as giving any specified information which is not given in it if the Secretary of State has the information in question.
	(6) The certificate must—
	(a) be signed by or on behalf of the court or authority which made or confirmed the order,
	(b) include a statement as to the accuracy of the information given in it,
	(c) if it is not in English, include a translation of it into English.
	The signature may be an electronic signature.
	(7) The order must be accompanied by an order made by a court exercising criminal jurisdiction in that country for the forfeiture of the property, unless the certificate indicates when such an order is expected to be sent.
	(8) An appropriate court or authority in a participating country in relation to an overseas freezing order is—
	(a) a court exercising criminal jurisdiction in the country,
	(b) a prosecuting authority in the country,
	(c) any other authority in the country which appears to the Secretary of State to have the function of making such orders.
	(9) References in paragraphs 41E to 41G to an overseas freezing order include its accompanying certificate.
	Enforcement of overseas freezing orders
	41E (1) Where this paragraph applies the Secretary of State must send a copy of the overseas freezing order to the High Court and to the Director of Public Prosecutions for Northern Ireland.
	(2) The court is to consider the overseas freezing order on its own initiative within a period prescribed by rules of court.
	(3) Before giving effect to the overseas freezing order, the court must give the Director an opportunity to be heard.
	(4) The court may decide not to give effect to the overseas freezing order only if, in its opinion, giving effect to it would be incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998).
	41F The High Court may postpone giving effect to an overseas freezing order in respect of any property—
	(a) in order to avoid prejudicing a criminal investigation which is taking place in the United Kingdom, or
	(b) if, under an order made by a court in criminal proceedings in the United Kingdom, the property may not be dealt with.
	41G (1) Where the High Court decides to give effect to an overseas freezing order, it must—
	(a) register the order in that court,
	(b) provide for notice of the registration to be given to any person affected by it.
	(2) For the purpose of enforcing an overseas freezing order registered in the High Court, the order is to have effect as if it were an order made by that court.
	(3) Paragraph 35 applies to an overseas freezing order registered in the High Court as it applies to a restraint order under paragraph 33.
	(4) The High Court may cancel the registration of the order, or vary the property to which the order applies, on an application by the Director of Public Prosecution for Northern Ireland or any other person affected by it, if or to the extent that—
	(a) the court is of the opinion mentioned in paragraph 41E(4), or
	(b) the court is of the opinion that the order has ceased to have effect in the participating country.
	(5) Her Majesty may by Order in Council make further provision for the enforcement in Northern Ireland of registered overseas freezing orders.
	(6) An Order in Council under this paragraph—
	(a) may make different provision for different cases,
	(b) is not to be made unless a draft of it has been laid before and approved by resolution of each House of Parliament."
	In paragraph 44 of that Schedule (enforcement of orders made in designated countries), in sub-paragraph (2), after the second "order" there is inserted "(other than an overseas freezing order within the meaning of paragraph 41D)"."
	Page 70, line 18, leave out paragraph 5 and insert—
	"In Part 4 of that Schedule (insolvency), in paragraph 45, in paragraph (c) of the definition of "restraint order", for the words from "external" to "virtue" there is substituted "order which is enforceable in England and Wales, Scotland or Northern Ireland by virtue of paragraph 11G, 25G or 41G or"."
	On Question, amendments agreed to.
	Clause 92 [Supplementary and consequential provision]:
	[Amendment No. 110 had been withdrawn from the Marshalled List.]

Baroness Anelay of St Johns: moved Amendment No. 111:
	Page 61, line 4, at end insert—
	"(2A) Before making an order under subsection (1), the Secretary of State shall consult the Scottish Ministers.
	(2B) Before making an order under subsection (1) the Scottish Ministers shall consult the Secretary of State."

Baroness Anelay of St Johns: My Lords, in moving this amendment, I shall speak also to Amendment No. 112.
	I make it clear immediately that these amendments are merely a device. I do not intend to press them. They do not seek to provide a solution to a problem caused by devolution; their purpose is simply to ask the Government to explain, with regard to Scotland, the position that will obtain when statutory instruments are made to give effect to the supplementary and consequential provisions that are part of Clause 92.
	The Bill makes it look as though different provisions could be made for Scotland than for the rest of the UK. That seems inadvisable, to say the least. The amendments are simply a device to ask the Government to put on the record what they consider would be the proper approach to these matters. I beg to move.

Baroness Carnegy of Lour: My Lords, my noble friend Lady Anelay is quite right to raise this issue. These could be very wide-ranging orders. This is a Henry VIII clause, and we could have wide-ranging orders within the competence of the Scots Parliament only or the Westminster Parliament for England, Wales and Northern Ireland only. It is important to clarify the position. Surely there should be consultation, whatever these orders are, between the two legal jurisdictions. I hope the Government can clarify that. It is no good simply saying that there will be. Conflicting orders could be made for some reason which would endanger the content of the Bill.

Lord Renton: My Lords, it is important that we do not have a Henry VIII clause here. The Bill is unusual; it breaks new ground and is of international as well as national importance. We need to see how it operates after a time. So, I hope that the Minister will observe what my noble friends have said.

Lord Filkin: My Lords, I am happy to try to give the explanation that the noble Baronesses, Lady Anelay and Lady Carnegy, have sought. I hope that in the process I will also satisfy the noble Lord, Lord Renton.
	Amendment No. 111 would ensure that the Secretary of State and Scottish Ministers will confer before making any order to amend primary legislation or make secondary legislation which makes supplementary or consequential provision for the purpose of bringing the Bill into full effect. I presume the intended purpose of the amendment is to ensure that the legislation will be applied consistently on both sides of the border.
	Where matters of the Bill fall within the competence of the Scottish Parliament, it is of course for Scottish Ministers to legislate. There is no requirement in the Bill for consultation to take place before doing so, but in practice Westminster departments have close relations with the relevant department of the Scottish Executive, and consultation is extensive. As the measures in the Bill will work most effectively if there is a consistency of approach north and south of the border, it is highly likely that consultation will take place on the implementation of the Bill. Indeed, I am happy to commit my officials to consulting with their counterparts in the Scottish Executive. I hope that this will give the reassurances sought.
	Amendment No. 112 seeks to extend the types of order that may be made under the power granted in subsection (1). The amendment actually appears to have as its effect an extension of the types of incidental provisions that may be made under this clause, although I am not sure whether this is the intended purpose.
	During our previous debate on this clause in Committee, the Government tabled amendments which now form subsections (5) to (8), so that any amendments to Acts of Parliament will be subject to affirmative procedure, although amendments to secondary legislation will still be by negative procedure. These amendments were warmly welcomed by the Delegated Powers and Regulatory Reform Committee, who recommended that they be tabled, and the noble Lords who attended Committee.
	We had detailed discussions about the necessity of such clauses and what type of amendments they would be used to make. As I explained then, the Delegated Powers Committee agrees that there are certain cases where this type of clause is justified, particularly where it would be difficult to anticipate the full extent of amendments during the passage of a Bill. As I am sure we all agree, the Bill is highly complex and amends a substantial amount of previous legislation. Although every effort has been made to ensure that all consequential provisions have been accounted for, it is possible that others may arise, particularly in relation to the highly technical road traffic provisions of Part 3.
	Under the clause, the appropriate Ministers are granted the power to make supplementary or consequential changes which add to, replace or omit any part of an Act of Parliament or, as the case may be, an Act of the Scottish Parliament. The wording reflects that used in Section 140 of the Adoption and Children Act 2002. The Government consider that the current drafting of the clause would cover circumstances where orders would "apply in modification" parts of other Acts of Parliament for the purpose of making supplementary or consequential provisions to give full effect to the Bill. The Government therefore do not consider that the amendment is necessary, as I hope I have explained to the satisfaction of the noble Baroness, Lady Anelay.

Baroness Carnegy of Lour: My Lords, before the Minister sits down, when he speaks to Amendment No. 111, he says he will give an assurance that Ministers will consult and agree. How can he do that? There will be an election to the Scots Parliament shortly. A quite different Administration may emerge then. How can the Minister be sure that there will be such consultation or agreement?

Lord Filkin: My Lords, I carefully sought to say that I could give a commitment on behalf of the United Kingdom Government that our officials would consult with the Scottish Executive. For very proper reasons, I could not commit the Scottish officials to consult with us for a point of delegation. I clearly have not touched on the point that the noble Baroness, Lady Carnegy, is getting at; I am sure she will be glad to enlighten me further.

Baroness Carnegy of Lour: My Lords, I am sorry to take up the time of the House, and I hope I have its leave. It may not be the same Government at Westminster. These orders could be made to conflict and ruin the Bill if there was no compulsory consultation between the two. The Minister is being a little too optimistic, but we shall leave the matter for the moment.

Lord Filkin: My Lords, I repeat that, whatever the political composition of the Scottish Executive, this Government will consult with their officials over these measures.

Baroness Anelay of St Johns: My Lords, I am grateful to the Minister for his reply and for putting it clearly on the record that he will commit his officials to consulting with their counterparts. However, my noble friend Lady Carnegy has made an important point. We will also have to consider how this provision operates in the future in order to achieve the consistent application of these provisions across Great Britain in Scotland, England and Wales.
	The Minister referred to the second amendment which I put down as a taster for the sunset clause. There is a subtle irony that we are debating Henry VIII powers with regard to Scotland when Henry VIII was not king of Scotland. No doubt my noble friend Lady Carnegy will be able to find another nickname for these clauses to make them more appropriate to Scotland. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 112 not moved.]

Baroness Anelay of St Johns: moved Amendment No. 113:
	Page 61, line 23, at end insert—
	"( ) This section shall cease to have effect at the end of three years beginning with the date on which it comes into force."

Baroness Anelay of St Johns: My Lords, I shall also speak to Amendment No. 114. These are the sunset clauses for the Henry VIII powers of Clause 92 to which the Minister referred in his last speech. I tabled both amendments to give the House the opportunity to debate the principle of which alternative is preferable. Let me make it clear that I think that one of them should be. As the Minister has just said, Clause 92 is an enabling clause giving the Government the opportunity to amend or repeal primary legislation by statutory instrument with or without further parliamentary scrutiny.
	The House debated these clauses recently as a result of the helpful report from the Delegated Powers and Regulatory Reform Committee. The Committee found that there could be circumstances in which Henry VIII clauses were appropriate per se. There might be Bills in which subsequent changes were about to take place that one could not necessarily foresee and it was necessary to have some form of Henry VIII clause.
	In that debate, the Committee's chairman, the noble Lord, Lord Dahrendorf, pointed out that any debate on those matters,
	"goes right to the heart of the key constitutional question of the limits of executive power, and of the ability as well as the duty of Parliament to prevent the unchecked extension of these limits".—[Official Report, 14/1/03; col. 165.].
	As well as speaking as chairman of the committee, the noble Lord made it clear that he made some comments in a private capacity. In that capacity, he said, at col. 169, that such clauses should be subject to a sunset provision. I agree with him. That is why I have tabled these two alternative sunset amendments.
	The first is the blunt weapon, which is more commonly used. It would give Clause 92 just three years of life. At the end of that period, the Government would have to revive it if they were in what one would think was the unlikely position of still not having got their act together over introducing any necessary supplementary and consequential provisions.
	The second amendment—Amendment No. 114—is a gentler device whereby, after three years, the clause would expire unless the Government brought forward an affirmative statutory instrument to keep it going. That would give proper parliamentary scrutiny of the process by which the Government had succeeded or failed to implement any necessary supplementary and consequential provisions.
	I am convinced that the sunset procedure would provide good practice for Henry VIII clauses, such as Clause 92. It would ensure that the Government got their act together and introduced any necessary amendments as soon as possible. Three years seems long enough for the Government to make decisions about amendments that are consequential or supplementary to the Bill. If they were still unable to make up their mind at that stage and believed that further amendments might still be necessary, Amendment No. 114 would give Parliament a vital scrutiny role to ensure that the original legislation was not redirected inappropriately. It would give Parliament the opportunity, after scrutiny, to allow Clause 92 to continue its life.
	Finally, a sunset clause would discourage hasty drafting in the first place. That is essential. As ever, I do not blame those who draft legislation. It is their political masters who cause the urgency and then sometimes change their minds at the last minute on what they hope to achieve with the legislation. I appreciate that those doing the drafting merely respond to the exigencies of the political world.
	In Committee I moved a much tougher sunset clause that would have allowed for only one year before the axe came down on Clause 92. That was a probing amendment—as it had to be, because one cannot vote in Grand Committee—to tease out the Government's response. I noted with interest that the Minister, at col. GC39, did not reject out of hand the principle of a sunset clause. He said he would consider the points made, without signalling that there would necessarily be a meeting of minds on sunset clauses. I hope that in its further consideration of these matters, the Home Office has concluded that it would be appropriate to adopt a sunset provision on Clause 92. Of course I will perfectly well understand if today the Government are prepared to dip their toes gently in the water of Amendment No. 114, rather than going the whole way with Amendment No. 113. I beg to move.

Lord Goodhart: My Lords, I shall speak briefly to the amendment. The Scottish equivalent to a Henry VIII clause might be a Macbeth clause. I also note that Amendment No. 114 is not quite as drastic as I originally thought. As drafted, the sunset provision appears to apply not just to the Henry VIII clause, but to the whole Act. I am glad to know that it applies only to the Henry VIII clause.
	A sunset provision for Henry VIII clauses is an interesting idea that is worth considering. In a written Answer to me last week, the noble and learned Lord the Leader of the House listed the occasions on which Henry VIII clauses relating to transitional and consequential provisions have been used in certain Acts. Those powers have been used much more extensively than I anticipated and well past the three-year period in some cases. That should be referred to the Delegated Powers Committee for further study rather than introducing it as part of a Bill at this stage, before the implications have been fully thought through. A time limit on this kind of Henry VIII clause is worth considering, but I do not support it on this occasion.

Lord Filkin: My Lords, the noble Baroness, Lady Anelay, invites us to take the bait of what she said was the less severe Amendment No. 114 if we could not take the bait of Amendment No. 113. I am afraid that we fell into the same trap as the noble Lord, Lord Goodhart, and took Amendment No. 114 at its face value. It would make the whole Act fall. That has been our mindset in drawing up our response. The noble Baroness will hear our views on why that is a bad idea. We shall reflect further on what she spoke to—without any hint of optimism—rather than the amendment as tabled.
	Amendment No. 113 would sunset the power in Clause 92—to make incidental and consequential provisions arising from the Bill—after three years. We were not altogether surprised that the amendment was tabled, following discussions in Committee, when some support was expressed for such a provision. During the debate on the special report of the Delegated Powers and Regulatory Reform Committee, the noble Lord, Lord Dahrendorf, expressed a strong preference in principle for sunset provisions, as the noble Baroness, Lady Anelay, mentioned. The purpose behind such a provision would be to place further restraints on the seemingly wide powers that the clause grants to amend legislation. However, as we have debated previously, those powers will be subject to thorough scrutiny and any order to amend Acts of Parliament would be subject to affirmative resolution, while any order to amend secondary legislation would be subject to negative resolution.
	Clause 92 concerns only supplementary and consequential provision. It is not a power to carry out a wholesale rewrite of the Bill. The Government have no intention of trying to use it to make any provision not within the scope of the clause. To try to do so would be ultra vires and unlawful. The power has sufficient checks attached to ensure that it is appropriately used. The further check provided by a sunset clause is not necessary.
	The amendment would set an unhelpful precedent. If every Bill were to include a sunset clause, the necessary reviews would place an unacceptably heavy demand on parliamentary time. The Government would prefer to review the recommendations of the Delegated Powers Committee case by case. We will be open to suggestion on the inclusion of sunset clauses where the committee thinks appropriate. The committee has proved itself to be a wise counsellor for the House on these matters, and I believe that we should continue to rely on its wisdom in the future.
	In the case of this Bill, the committee did not conclude that a sunset provision would be appropriate, and the Government see no reason to think otherwise. I would reinforce that by drawing attention to the Bill's complexity, on which we have commented on many occasions, and which is demonstrated by Schedule 4, which runs to 11 pages. The amendments regarding road traffic offences also are extremely technical and complex. It would be marvellous if we were certain that, in three years, we would have identified every glitch and error. However, we would be foolish to think that we would be able to do that.
	In our view, Amendment No. 114 goes even further, by placing a three-year expiry date on the entire Bill. In effect, that would instigate a review procedure of the Act three years after it has come into force. Reference has been made to the acknowledgement by my noble and learned friend Lord Williams of Mostyn that sunset clauses can be a useful device which are appropriate in some legislation. I think that he was referring specifically to the Police (Northern Ireland) Bill and to 50:50 recruitment in the post-Patten proposals. Such measures to strike a balance between the different communities in Northern Ireland are clearly exceptional, and one very much hopes that they will not be needed in future. This Bill is different. We are saying that we think that there will be occasions when consequential amendments are necessary to deal with complex drafting inadequacies which we have identified in the Bill.
	I am happy to assure the House that we will not let the legislation drift. I do not believe that there is a need for a statutory review process. As noble Lords are aware, large sections of the Bill build on and replace the Criminal Justice (International Co-operation) Act 1990. In Committee, when we were discussing the operation of that Act, various noble Lords indicted that perhaps that Act itself represents a review of the earlier legislation.
	As this Act is implemented, the Government, the UK Central Authority and other bodies involved in the direct implementation of the provisions will be looking closely at the effectiveness of the legislation. So these provisions will not be allowed to drift, but will be reviewed as they are put into practice.
	I cannot accept that legislating for just three years ahead is an efficient way to legislate or an efficient use of parliamentary time. I appreciate, however, that the noble Baroness, Lady Anelay, has said that the amendment does not express quite what she had intended to say. We will undoubtedly have opportunities between now and Third Reading to reflect on what she did mean. I hope that I have explained the broad thrust of the Government's position.

Baroness Anelay of St Johns: My Lords, the Minister has anticipated what I was going to say in some respects but not in others. I shall certainly reflect on the matter between now and Third Reading. I shall not press the amendments today. At that stage, however, I shall return to the issue of sunset clauses and the principle of having the "softer", three-year amendment in relation just to Clause 92. Today, I simply wanted to raise a debate on the principle of sunset clauses. The Minister anticipated that I might deploy an argument based on the words used by the noble and learned Lord, Lord Williams of Mostyn; but I have not done so. It was obvious that those advising the Minister thought that I might rerun the arguments I used in Grand Committee. I deliberated on doing that, but realised that that was not my strongest point. I realised that I have much better arrows in my quiver and was able to leave aside that argument.
	The Minister made one point to which I must refer. The Government have taken into consideration the fact that these matters shall be decided on a case-by-case basis by the Delegated Powers and Regulatory Reform Committee. We value enormously the work done by that committee, and we pay very close attention to every word in its reports. Ultimately, however, it is for the House to decide. There are occasions, very few in number, when the committee does not comment on something to which we object, and vice versa. So although the Minister is quite right that the committee should consider these matters further—I think that the noble Lord, Lord Goodhart, was right that these matters should be referred to the committee—I do not think that that is the only possible course of action. We will think about doing something about that at Third Reading. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 114 not moved.]
	Clause 94 [Extent]:

Lord Goodhart: moved Amendment No. 115:
	Page 61, line 36, at end insert—
	"( ) Her Majesty may, by Order in Council, direct that any provision of this Act shall extend, with such exceptions, adaptations and modifications, if any, as may be specified in the Order, to any of the Channel Islands or the Isle of Man."

Lord Goodhart: My Lords, this is the last amendment on the Marshalled List and I shall be as quick as I can.
	This amendment was moved in Grand Committee by my noble friend Lord Wallace of Saltaire. Its purpose is to authorise the Government, by Order in Council, to ensure that any part of the Bill may be extended in its operation to the Channel Islands and the Isle of Man.
	It is clear that some parts of the Bill are of no concern to mainland United Kingdom, such as Part 3 on the mutual recognition of driving disqualifications. However, other parts are of very considerable concern—such as the provisions about freezing orders, under Chapter 2 of Part 1, and in particular the provisions relating to financial information under Chapter 4 of Part 1. It is clearly important that the islands should be as active in defeating money laundering and the financing of terrorism and international crime as the United Kingdom itself because of the status of the islands as offshore financial centres of real international importance. It is, therefore, desirable that steps should be taken to apply the relevant provisions of the Bill, or equivalent provisions, to the islands.
	Of course, the best course would be for the islands to enact their own legislation. I hope, indeed, that that will happen. But the United Kingdom Government retain residual authority to advise the Queen to make an Order in Council, having authority in the islands. That power carries great influence. A great deal of pressure can be put upon the islands.
	Do the Government expect that the authorities in the islands will take steps to adopt legislation to the same effect as the relevant provisions of the Bill, so far as it is possible for them to do so? Will the Government use their influence and, if necessary, their powers to ensure that that happens? I beg to move.

Lord Filkin: My Lords, I am glad to respond to the amendment of the noble Lord, Lord Goodhart, or rather to the questions behind it, as fully as I can, although in many cases they touch on issues of constitutional law which we do not have the competence to override, as I shall explain.
	The amendment replicates an amendment that was tabled by the noble Lord, Lord Wallace of Saltaire, in Committee. It appears that we have not been able to satisfy him adequately.
	The noble Lord has previously expressed his concern that clauses of this nature appear in some Bills but not others and is keen to know why. As we explained, a provision such as the amendment suggests can be included in UK legislation only after consultation with, and with the consent of, the islands. It cannot be done unilaterally, as the amendment would require.
	As my noble friend Lord Bassam explained previously, unlike purely domestic legislation, it is not appropriate to include the standard extension wording where the Bill is enacting our EU obligations. Unlike standard Community business, where territorial extent is defined by the treaty, Third Pillar co-operation, which is implemented by this Bill, has no specific territorial application. The inclusion of Gibraltar and the islands in an instrument is considered with our European partners at the time it is negotiated and their inclusion can then be specified in the instrument where this is agreed. As the islands have chosen not to participate in the measures covered by this Bill, we cannot use the Bill to change that situation.
	The motivation behind this amendment is the wish to ensure that the Channel Islands and the Isle of Man do not become havens for criminal finance and money laundering. The offshore banking industry thrives in those islands. As we explained previously, the UK Government have been active in promoting good practice in this area, setting up the Edwards Review in 1998 and following up its recommendations in co-operation with the islands. The Edwards report praised the islands' systems to combat money laundering in all the islands, and its detailed recommendations for improvements have largely been implemented.
	The authorities are keen to remain compliant not only with international standards but also with international best practice. While they are not obliged to implement the EU Money Laundering Directive, in practice they have introduced many of the provisions of the 1991 directive and have gone further in some respects. We shall be introducing regulations to implement the 2001 directive later this year. We understand that the authorities in the Channel Islands have indicated that once we have done so they will consider introducing similar provisions where they do not already exist, as well as the money laundering provisions (Part 7) of the Proceeds of Crime Act. The same arguments apply in the case of the Isle of Man. Although at present the islands will not be able to participate in specific requests under the protocol, tight regulation of the financial sector ensures that financial criminality is not allowed to flourish.
	When the UK was applying to participate in the Schengen convention, the islands were consulted about whether or not they wished to participate. In the event, it was not possible to agree a common level of participation between the islands and it was felt that widely ranging degrees of participation would serve only to create more confusion.
	The Crown Dependencies were not consulted about the inclusion of a permissive extent clause in this Bill as they customarily enact their own laws in the field of criminal justice. As the noble Lord is aware, they have their own separate legal and judicial systems. It is exceptional these days for UK legislation to be capable of extension to the Crown Dependencies save in a few areas such as immigration. As we discussed before, a copy of this Bill will be sent to the islands and it will be for them to decide whether there is anything in it which they might wish to copy in their own legislation, as they have done in the past with earlier UK criminal justice legislation.
	As my noble friend Lord Bassam informed the noble Lord during the course of our previous debate on the matter, the responsibility for the constitutional arrangements of the Channel Islands has now passed to the Lord Chancellor's Department. I understand that the noble Lord has written to the Lord Chancellor seeking a briefing meeting with officials in his department to discuss the application of UK legislation to the Crown Dependencies. I have seen the Lord Chancellor's letter of reply to the noble Lord, Lord Wallace of Saltaire, offering a meeting and indicating the name of the head of the constitutional policy division, who is commended as an expert in these matters. I very much hope that the offer of a meeting and a discussion will be useful to the noble Lord, Lord Wallace. I hope that I have explained why we cannot accept the amendment but that I have opened up an avenue of discussion with the Lord Chancellor's Department.

Lord Goodhart: My Lords, I am most grateful to the noble Lord for his full and helpful reply. I think that the questions have been answered as far as possible, and I can safely say that the amendment will not come back on Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	House adjourned at twenty minutes past eight o'clock.